Luxury Car Dealership Bay & Drive Receives 45-Day Stay of Proceedings

The Central District Court in Lod has granted a 45-day stay of proceedings to the luxury car dealership Bay & Drive, owned by Uri Dgami and Yitzhak Maya. The company is facing a severe cash flow crisis and accumulated debts totaling 97 million shekels. Attorneys Avner Cohen and Chen Bardichev have been appointed as arrangement managers for the company.

The court's decision aims to allow Bay & Drive to finalize a deal to sell its main asset, an operating complex in Netanya, for 51 million shekels. Judge Hannah Kitzis has instructed the arrangement managers to assess the company's situation and submit their recommendations.

Bay & Drive, established in 1997, deals in vehicle trading, leasing, rentals, and trade-ins. The company reached its peak in 2022 with an annual turnover exceeding 600 million shekels and a fleet of approximately 1,100 vehicles. However, since late 2022, the company has experienced a deep business crisis.

According to the company, a sharp rise in interest rates significantly increased financing costs for its vehicle fleet and inventory. This was compounded by declining demand, the entry of lower-cost brands and electric vehicles, and a sharp drop in commercial activity following the outbreak of the "Swords of Iron" war. These factors led to liabilities of about 97 million shekels, including secured debts, priority debts (approximately 10.9 million shekels to the tax authorities), supplier debts, and personal guarantee debts.

To navigate the crisis, Bay & Drive reduced its workforce and sold its leasing operations over the past year. In May 2023, an agreement was signed to sell its Netanya property and showroom to Mirea Finance Ltd. for 51 million shekels plus VAT. However, recent tax authority levies on operating accounts and a 5 million shekel deposit held in trust for the sale paralyzed daily operations and put the deal at risk of immediate cancellation.

The company sought the court's intervention to delay proceedings, enabling the arrangement managers to complete the property transaction under court supervision. This is intended to ensure the company continues operating as a "going concern," preventing a collapse and liquidation that would severely harm creditors, employees, and the automotive market. The arrangement managers are expected to submit their initial report to the court within 50 days.