Liquidity Claims OpenWeb Hid Microsoft Contract Termination

Mars Growth Capital, part of the Liquidity group, has accused OpenWeb of failing to disclose that Microsoft terminated its contract in February 2026 due to allegations of invalid traffic. Liquidity claims it only learned of the termination when OpenWeb initiated legal proceedings, calling the non-disclosure a "severe and most significant development" that was not revealed to the secured lender in real-time or for many months afterward.

In parallel with these allegations, Mars has filed a request with the Tel Aviv District Court to enforce security interests and appoint a receiver for OpenWeb, citing a debt of approximately $20 million. The request seeks to seize and manage OpenWeb's assets in Israel, including bank accounts, customer receivables, and intellectual property. Mars is also opposing OpenWeb's request for temporary relief within its insolvency proceedings, arguing that OpenWeb's portrayal of the situation to the court is "completely opposite to reality."

The financing agreement, signed in January 2025, provided OpenWeb with a credit line of up to $30 million, of which $24.4 million was ultimately drawn. Liquidity contends that despite OpenWeb's failure to meet its financial projections and its deteriorating financial state, it showed considerable patience. The lender claims that even during the additional withdrawal in June 2025, the company's performance was below its business plan.

Liquidity further alleges that OpenWeb misrepresented a potential sale of the company, initially presenting it as a full acquisition that would allow for full debt repayment, but later revealing it was only a partial asset sale. This, combined with the alleged non-disclosure of the Microsoft contract termination and underperformance against projections, forms the basis of Liquidity's claims of a "clear and ongoing material deterioration" in OpenWeb's condition.

OpenWeb's 2025 revenues reportedly reached about $121.58 million, significantly below the projected $193.7 million, with an EBITDA loss of approximately $28.4 million against a projected loss of $8.6 million. Future projections were also drastically reduced. The court must now decide between OpenWeb's request for insolvency protections and Mars' demand to seize assets and appoint a receiver.