Retail bankruptcy case: jail terms for Schlecker offspring

Meike and Lars Schlecker were each sentenced to jail terms of two years and seven months Thursday over breach of trust and insolvency delay and abetting charges upheld by the Karlsruhe-based court.

The terms are slightly less than the sentences of 31 and 33 months imposed respectively on Schlecker's adult children in November 2017 by the Stuttgart regional court.

At the 2017 trial judges found that in January 2012, just days before one of Germany's most well-known toiletry and household goods chains filed for insolvency, Anton Schlecker steered millions of euros away from creditors to his children, notably a personnel service subsidiary they ran, LDG.

Read more: Schlecker empire's rise and fall

Stuttgart's regional prosecutions office said the pair, now in their mid-40s, would begin their prison terms in the coming months, once court sentencing files were delivered.

Only children sought appeals

Schlecker senior, now 74, was sentenced in 2017 by the Stuttgart court to two years on probation and fined for bankruptcy offences. He did not pursue an appeal to Karlsruhe. His wife, Christa, was initially charged during the Stuttgart proceedings but later let off.

The Supreme Court on Thursday said the Stuttgart judges had seen a "most serious" breach in that each child had deliberately withdrawn funds from LDG, thereby causing its over-indebtedness - put at €6.1 million ($6.8 million).

The Karlsruhe court in setting the slightly shorter jail terms said the Stuttgart trial judges had made an omission in overlooking that neither Meike nor Lars were retail chain creditors owed repayment.

Once dotted across 13 European countries

The Schlecker chain, based near the southern city of Ulm – and once dotted across 13 European countries, collapsed in early 2012, leaving 27,000 mainly low-paid employees, mostly women, unemployed and feeling abandoned by authorities.

Stuttgart judges found that as early as January 2011 the Schlecker family realized that insolvency was looming and Schlecker senior should have stopped transfers from the chain or out of his private assets.

In a settlement with the chain's insolvency administrator, the family in 2013 began partial repayments, now put at €14 million. Creditors initially lodged 1 billion euros in claims, according to Germany's dpa news agency.

In 2018, a civil-law settlement was reached in Linz, Austria, for an Austrian successor enterprise, but the amount was kept confidential.  

ipj/ng (dpa, AFP, Reuters)