Signa Development files for insolvency with $1.3 billion in debts -KSV

FRANKFURT (Reuters) -Signa Development, a key division of European property company Signa, filed for insolvency on Friday in a Vienna court with debts of around 1.16 billion euros ($1.28 billion), the KSV creditor protection association said.

Signa on Thursday had said that the development division, as well as its big business Signa Prime, would be filing for insolvency this week, in what was a significant twist in the unravelling of founder Rene Benko’s real estate empire.

Signa Development has 39 projects in the works, according to KSV. Projects are located in Vienna, Berlin, Wolfsburg, Germany, and elsewhere, according to Signa’s website.

The holding company of Signa – a group of some 1,000 companies, with high-profile projects and department stores across Germany, Austria and Switzerland – filed for insolvency last month with around 5 billion euros in debt.

Other divisions have since followed suit, making Signa the biggest casualty so far in Europe’s real estate crisis.

($1 = 0.9030 euros)