Galeria employees to receive insolvency benefits in Germany
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Approximately 10,000 employees of Galeria, a German department store chain, will receive insolvency benefits from the Federal Employment Agency.
The agency determined the workers have a legal claim to the benefits after a thorough review of the complex situation. The payments will cover 9,650 employees out of Galeria’s total workforce of 11,250, with a separate insolvency process underway for the company’s food and beverage divisions.
The Federal Employment Agency spent several days considering the case and repeatedly requested documents from the insolvency administrator. A key point of contention was the lingering effects of Galeria’s previous 2020 insolvency. However, Galeria had transferred operations to a new company that isn’t formally under the oversight of the previous restructuring plan. The insolvency benefits, equivalent to net salary, will be pre-financed through a bank to ensure quick payment to employees.
This pre-financing meets a requirement for continuing business operations while the insolvency proceedings are underway. The agency normally pays the benefits retroactively, after the insolvency proceedings have begun, but is making an exception to support the workers. Monthly salaries for all 11,250 Galeria employees total nearly 25 million euros.
