The Innsbruck Regional Court has found real estate entrepreneur René Benko partially guilty in an insolvency case. He was sentenced to two years in prison for damaging his creditors.

Austrian entrepreneur René Benko has been sentenced to two prison terms for damaging his creditors. A jury of the Innsbruck Regional Court ruled that the 48-year-old had stashed assets by donating €300,000 to his mother. Benko was acquitted in the case of a €360,000 advance rental payment. The verdict is not final.

Only one of 14 cases against Benko

In this case, Benko had to answer for his insolvency as a sole proprietor. The indictment is just one of a total of 14 cases in which the Austrian judiciary alone is investigating, mostly for serious fraud and breach of trust.

The proceedings are considered the first of a potential series of lawsuits surrounding the largest bankruptcy in recent Austrian history. In the fall of 2023, the real estate and retail conglomerate Signa, comprised of more than 1,130 companies, gradually slipped into insolvency. Rising interest rates and its own mistakes had undermined Signa's business model.

The total creditors' claims against Signa Holding and its individual companies are in the billions of euros. Benko also made headlines in Germany with, among other things, the acquisition of the department store chains Kaufhof and Karstadt. In retrospect, the entry into brick-and-mortar retail is considered one of the most detrimental factors to Signa's business.

From school dropout to billionaire

At his peak, Benko's fortune was estimated at almost five billion euros. His takeover of the Tyrol department store in Innsbruck in 2004 caused a sensation. In Vienna, he developed the"Golden Quarter" in a prime downtown location. He later acquired stakes in buildings such as the Chrysler Building in New York, the luxury Selfridges department store in London, and the Elbtower in Hamburg.