Galeria workers to receive pre-financed insolvency pay as court orders provisional proceedings
Employees of the insolvent Galeria department-store chain will be paid insolvency benefits, which are being pre-financed by a bank to speed up distribution.
Galeria, the German department-store chain that has entered insolvency for the fourth time in six years, will have its employees receive insolvency benefits from the Federal Employment Agency. To ensure rapid payouts, a bank will pre-finance the benefits, which are normally paid retroactively for up to three months of net salary after the insolvency filing. The Düsseldorf court ordered a provisional insolvency procedure, permitting the 83 retail outlets to continue operating temporarily.
The exact number of stores that may close later has not been decided. Around 1,600 workers in food sections and restaurant areas are included among the staff awaiting payment. The arrangement aims to keep the business running while the legal process unfolds.
Why it matters
It shows how German authorities are handling employee protection amid repeated retail chain failures.
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