Workers who lost their jobs when the firm shut its stores in 2012
cheered in court when the prison sentences were read out.
Anton Schlecker, 73, received a suspended two-year prison sentence
and a 54,000-euro ($64,487) fine for intentional bankruptcy.
Prosecutors had demanded a three year-prison term, accusing him of
siphoning off millions of euros from the company even as its
financial situation worsened.
Under German law, removing assets from a company that faces imminent
bankruptcy is illegal.
"He knew that company had reached the end of the line, and still
kept hoping," presiding judge Roderich Martis said in the regional
court in Stuttgart.
Schlecker's 46-year-old son Lars and daughter Meike, 44, were jailed
for 33 and 32 months, respectively, for the more serious charge of
embezzlement, alongside delaying insolvency proceedings and being an
accessory to bankruptcy.
Unlisted Schlecker, a household name in Germany, filed for
insolvency in January 2012, hit by competition from rivals Rossmann
and dm and after failing to secure funding to upgrade its stores.
All 2,800 outlets closed that year, leaving around 23,000 employees
out of work and draining the Schlecker family's multi-billion-euro
Anton Schlecker, who went bankrupt after his company's collapse, had
told the court in March that he never saw the insolvency coming and
had not intended to misuse company funds for his family's personal
Lawyers representing his two children had also rejected the charges
brought against them.
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But judge Martis told the court in his closing statement that
Schlecker had only 7 million euros of liquidity left by early 2011
and had no chance of obtaining loans to invest in its stores and pay
The company's chances of survival were worsened further by the fact
that Schlecker paid logistics company LDG, controlled by his
children Lars and Meike, excessive rates to transport goods from
warehouses to Schlecker's stores, Martis said.
And only days before the insolvency filing, Anton Schlecker
transferred 7 million euros of proceeds from commercial real estate
sales to his children as a distribution of profits, Martis added.
The Schlecker family agreed in 2013 to return around 10 million
euros to creditors and paid another 4 million euros this month as
"reparation", Anton Schlecker had told the court.
"But no former Schlecker worker will get a new job or lost wages
from that money," German labor union Verdi said on Monday.
(Reporting by Alexander Huebner; Writing by Maria Sheahan; Editing
by Jason Neely and Andrew Heavens)
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