Sep 1, 2009
Arcandor insolvency proceedings begin
Sep 1, 2009
DUESSELDORF, Germany (Reuters) - A German court opened insolvency proceedings for retailer Arcandor (AROG.DE) on Tuesday 1 September after its administrators had three months to assess the situation at Arcandor, evaluate assets and talk to creditors.
Arcandor filed for insolvency in June after its requests for state aid failed. Its management stayed on and worked with the interim administration to keep the group operating as a whole.
But they gave up the search for a new anchor shareholder in August, citing a difficult market environment.
The proceedings also affect Arcandor's Primondo GmbH, Karstadt Warenhaus GmbH and Quelle GmbH units.
Chief Executive Karl-Gerhard Eick, the former finance chief of German telecoms group Deutsche Telekom (DTEGn.DE) who took the helm at Arcandor in March, is expected to step down from his post, sources close to the matter have told Reuters.
Eick inherited troubles at the Essen-based group, which also held a roughly 53 percent stake in Europe's second-largest travel company, Thomas Cook (TCG.L), now mainly kept by its creditor banks which plan to sell the stake soon.
In 2004 Arcandor had already been on the brink of collapse, but was saved by a capital hike, asset sales and job cuts. A year later, Thomas Middelhoff became CEO. He cut more jobs, divested more assets and sold the group's real estate portfolio to alleviate Arcandor's debt burden.
By the time Eick took over from Middelhoff Arcandor still had more than 1 billion euros (882 million pounds) in net debt.
(Reporting by Eva Kuehnen, Editing by Michael Shields)
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