Insolvency benefit approved

The Bundesagentur für Arbeit, Germany's Federal Employment Agency, decided on Tuesday, 13 October 2026 that employees of the Galeria department store chain will receive insolvency benefit (Insolvenzgeld). The chain applied for insolvency at the Düsseldorf local court on 2 October on grounds of inability to pay, its fourth filing within six years. The court ordered preliminary proceedings, and the 83 branches keep trading for now. The agency said in a statement:

After intensive examination of the complex facts, there is, on the basis of the applicable legal situation, in principle a claim to insolvency benefit.

The benefit only becomes payable once formal proceedings open, which usually takes around three months. Until then a bank pre-finances the payments so that wages reach employees' accounts on time. The agency had weighed the decision for days and requested documents from the administrator several times, according to dpa information cited by Bayerischer Rundfunk.

Employees and payroll

Figures vary between outlets. Bayerischer Rundfunk reports that the benefit will be paid to 9,650 employees out of 11,250 in total, because a separate insolvency application covers part of the workforce, including the gastronomy and food divisions. Other outlets put the workforce at about 12,000. According to the union Verdi, around 150 employees work at the Wiesbaden branch. Total monthly salaries for all 11,250 employees are reportedly close to 25 million euros. Staff last received their September pay at the end of that month, so the next payments depend on the benefit.

Gordon Brothers and the credit line

Handelsblatt reports that Gordon Brothers, a Boston-founded firm that specialises in corporate financing in special situations, has become Galeria's most important creditor. Its lending is largely run from London and secured on the chain's inventory, so the credit line moves with the value of the stock. WirtschaftsWoche reports that a 140 million euro credit from the firm prevented a new insolvency in June, but much of it immediately repaid a loan from Bain Capital and settled debts with landlords. Handelsblatt also reports that Gordon Brothers agreed to let suppliers and service providers be paid from ongoing sales until mid-October. How much money has flowed between the two companies is not known.

Suppliers reclaim goods

Some suppliers are asserting ownership of goods they have not been paid for. Under retention of title (Eigentumsvorbehalt), delivered goods stay the supplier's property until paid, so manufacturers can reclaim them from the administrator. In a Berlin branch, shelves of Playmobil toys, Geox shoes, stationery and dog toys are cordoned off with signs saying the goods are temporarily excluded from sale. Bild reports that suppliers want the proceeds from these goods kept out of the general insolvency estate. People close to preliminary administrator Frank Kebekus said some manufacturers had claimed ownership and banned sales, and that a contractual arrangement could keep the proceeds of certain brands outside the estate. Playmobil declined to comment on operational details.

Wiesbaden and the wider future

In Wiesbaden, around 150 employees remain at the last department store in the state capital, on Mauritiusplatz. Joachim Will, a retail location analyst at Ecostra GmbH, considers the department store concept no longer viable and calls a further vacancy "ein schwerer Schlag für Wiesbaden". The former Galeria building on Kirchgasse has stood empty since 2023 without a new investor. Will argues that a sensible use bringing in visitors remains possible there. Administrator Kebekus has three months to decide the chain's future, and which of the 83 branches will close is still open. A Handelsblatt commentary argues the approval only gains time and does not change the chain's poor prospects.