Mubadala Investment Company secured an arbitration award of more than EUR 700 mn linked to its exposure to the collapsed Austrian real estate group Signa — a ruling that now leaves Austrian courts to decide how awards issued outside the insolvency process are treated, Bloomberg reports, citing the Creditreform creditor association.

IN CONTEXT- Mubadala had sought to recover around EUR 900 mn from Signa entities, founder René Benko, and related trusts, accusing them of financing agreements breaches tied to its lending exposure.

A long-running process: In a previous arbitration case, Mubadala’s Mamoura Diversified Global Holding had filed claims totaling EUR 713 mn, which were rejected in insolvency proceedings — a setback that led the group to flag an expected AED 1.2 bn credit hit linked to its Signa exposure. The arbitration award has since been passed to insolvency administrators and ranks among the largest judicial decisions to emerge from Signa’s collapse.

Where it gets tricky: The award was granted outside Austria’s domestic insolvency regime, leaving courts and administrators to decide whether it can override earlier rejections — a move creditor groups warn could complicate proceedings and further erode remaining funds through litigation costs. Signa also has outstanding dues to judicial firms, meaning it might not even be able to cover insolvency process costs.

Background

The Signa unraveling: Once a heavyweight in Europe’s luxury property market — with trophy assets including Selfridges in London — Signa filed for insolvency in 2023 as higher borrowing costs and tighter credit conditions upended the sector. At the time, its total assets were valued at USD 29 bn. Founder René Benko is currently in custody in Austria following convictions for insolvency fraud, with prosecutors in several countries investigating further allegations. Benko has appealed and denies any wrongdoing.

Tags: