German court opens bankruptcy proceedings for struggling Galeria chain

A German court on Monday ordered preliminary insolvency proceedings for Galeria, after the struggling department store chain filed for bankruptcy for the fourth time in six years.  

The Dusseldorf district court published a notice confirming the proceedings, with lawyer Frank Kebekus appointed administrator.

Kebekus, who previously served as administrator in the company's insolvency proceedings in 2020 and 2022, is authorized to collect Galeria's bank balances and to receive incoming funds.

Galeria said on Friday that business operations are set to continue at the firm's 83 branches for the time being. 

The company's 12,000 employees were informed of the step on Friday morning and now face uncertainty about their jobs, and about whether they will receive insolvency pay, as Galeria remains under supervision after its most recent insolvency proceeding.

Restructuring expert Manfred Hunkemöller was critical of the appointment of Kebekus as preliminary insolvency administrator.

 "Kebekus is an excellent restructurer. But he has already overseen Galeria twice. For a genuine fresh start, I would have recommended an administrator who has not been previously involved," he said.

Numerous branches were closed as a result of the previous insolvencies in 2020, 2022 and 2024.

Creditors waived billions in claims to enable the department store chain to find a way out of the crisis.