Tel Aviv Shared Office Firm Secures Court Approval for Debt Settlement
A Tel Aviv shared office provider for independent lawyers has secured court approval for a 6.3 million NIS debt settlement backed by 100% of creditors, ensuring its survival as a going concern.
A Tel Aviv-based company providing shared office services to independent lawyers has secured court approval for a comprehensive debt settlement plan supported by 100% of its creditors. The agreement ensures the continuation of the business as a going concern following a severe financial crisis.
Restructuring and Shareholder Injection
The approved five-year settlement plan involves an immediate infusion of capital and structured payments derived from ongoing operational revenues, cash reserves, and arrangements with Bank Leumi. The arrangement was submitted by settlement manager Adv. Elad Afari from the Naschitz Brandes Amir & Co. law firm.
Under the terms of the agreement, shareholders will inject a total of 3.25 million NIS into the company, supplementing an initial 550,000 NIS transfer, bringing their total injection to 3.7 million NIS. Total funds channeled to the settlement fund and creditors will reach approximately 6.3 million NIS. Creditor payments will be executed semi-annually over the five-year period.
Background to the Financial Crisis
Founded by attorneys Elad Netz and Danit Lary alongside other prominent legal figures, the company serves roughly 600 independent lawyers. In June, the firm stunned clients by filing for a stay of proceedings to formulate a debt settlement, warning of imminent collapse.
Company executives attributed the distress to cumulative market pressures, including the COVID-19 pandemic, the security escalation following October 7, surging interest rates, and a slowdown in office demand. Additional strain stemmed from extensive reserve duty call-ups among client lawyers and the company's CEO, which depressed client incomes and forced contract cancellations.
Resolution and Real Estate Shift
Management and operational control will fully transfer to the shareholders on October 31. The company successfully resolved its dispute with landlord Sela Capital, releasing itself from an above-market lease agreement after Sela Capital leased the disputed floors to alternative tenants.
"The joint efforts of the company and the settlement manager have borne fruit, producing a recovery outline combining efficiency measures, funding sources, and debt reductions," stated court filings. The company currently maintains operations on designated floors at the Museum Tower and HaArba'a Tower in Tel Aviv.
