Partners, which provides office space and related services to about 600 independent lawyers, told clients unexpectedly that it had gone to court seeking a stay of proceedings to allow it to reach an overall debt restructuring deal. The company said the request was driven by external factors that created cash-flow problems and could threaten its continued existence.
In its filing, Partners said the danger of an immediate collapse was real. It cited a series of pressures in recent years, including the COVID-19 pandemic, the security crisis since October 7, higher interest rates, a slowdown in office demand, and the mobilization of lawyers and its own CEO for reserve duty, which reduced revenue and caused some clients to end their contracts.
The company, founded by attorneys Elad Netz and Danit Lari and led by chairman Dudi Zelmanovitz and CEO Avi Kalfa, also blames its landlord, Sela Capital, for demanding rents above market level. Partners says it is tied to a heavy long-term lease for floors 34 and 35 in the Azrieli Sarona towers in Tel Aviv, and that Sela refused to lower the rent and sought to enforce guarantees. Partners points to another law firm, Sullivan, which it says left a floor in the same tower because of high rent and moved from the 35th to the 14th floor at a much lower price.
Sela Capital says the tenant unilaterally breached the lease, stopped paying the agreed rent for months, and began offsetting payments on its own. It also says it had already granted concessions, including waiving interest and penalties and arranging payment installments in an agreement signed in November 2024. The company says no material change has occurred since then.
The court has issued an interim order freezing enforcement of the guarantees and appointed a special manager. Partners says it wants to avoid insolvency, continue operating, and be released from the burdensome lease as part of a broader restructuring.
