Paloma Dead Sea Seeks Haifa Court Approval for 16 Million NIS Debt Settlement
Israeli cosmetics firm Paloma Dead Sea has applied for a debt settlement of 16 million NIS amid cash-flow issues caused by the pandemic, war, and export challenges.
The Israeli cosmetics company Paloma Dead Sea, which develops and markets mineral-based skincare products, has run into cash-flow difficulties and applied to the Haifa District Court for a debt settlement. Founded in 1999 and owned by brothers Eli and Ran Segev, the company sells its products domestically, abroad, and in the tourism sector under the Paloma and Jericho brands.
According to the petition, the company's debts to external creditors stand at approximately 16 million NIS, while owner loans bring the total liabilities to about 26 million NIS. The firm attributes its financial crisis to a succession of blows, including the COVID-19 pandemic, the Swords of Iron war, the collapse of incoming tourism and exports, a sharp decline in the US dollar exchange rate, and tariffs imposed on Israeli goods imported into the United States.
Proposed Debt Settlement and Asset Liquidation
Paloma Dead Sea proposes restructuring its debt over a 60-month period, with a total settlement payout of about 4.9 million NIS. The funding sources presented for the arrangement include asset liquidation—specifically rights to a property in Caesarea and an apartment in Netanya—as well as monthly cash-flow contributions of 20,000 NIS. The company noted that its shareholders have injected roughly 10 million NIS in owner loans over the years while foregoing salaries.
"The objective of the proceeding is to rehabilitate the remaining operations, preserve the company as a going concern, safeguard jobs, and secure a higher payout for creditors compared to liquidation," stated Adv. Erez Borg, representing the company.
Court Proceedings and Future Outlook
The company is asking the court to appoint a settlement manager rather than forcing liquidation. It emphasized that external manufacturers and entities involved in producing its soaps operate independently and remain unaffected by its financial distress. At the company's request, the Haifa District Court issued a temporary stay of proceedings, and Judge Bettina Tauber scheduled a hearing for October 7.
Legal representatives highlighted that roughly 80 percent of the company's sales are destined for export, and the business had remained profitable and stable for years prior to the compounding crises.
