Israeli Tech Unicorn OpenWeb Files for Bankruptcy Protection
OpenWeb, formerly a fast-growing Israeli advertising technology company that reached a $1.5 billion valuation and prepared for an IPO during the COVID-19 pandemic, has filed for court protection from creditors in Tel Aviv. The company is seeking a stay of proceedings and the appointment of a trustee, as insiders fear significant employee layoffs and damage to its operations.
The move comes after the Israeli debt fund Liquidity, which has become more active recently, demanded repayment of a $20 million debt. In its filing, OpenWeb, represented by attorneys from Herzog Law Firm, claims that Liquidity alleged a breach of debt terms due to a "material adverse change" in the company's condition, a claim OpenWeb disputes as baseless and based on incorrect assertions.
OpenWeb further alleges that before the repayment deadline set by Liquidity, the fund took "unilateral and aggressive actions" against the company's and its group's overseas bank accounts. According to the filing, these actions disrupted OpenWeb's ability to access funds for continued operations and thwarted a financing plan intended for restructuring or capital injection, ultimately leading the company to a state of cash flow insolvency.
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