Jerusalem Contractor Seeks Receiver Amid Over 60 Million Shekel Debt

The long-standing Jerusalem construction company, Neta Lipschitz, has requested the appointment of a temporary receiver and the opening of proceedings for economic rehabilitation due to accumulating debts exceeding 60 million shekels. The company, represented by attorneys Shai Nachum and Ilan Gelman, seeks the receiver to ensure its continued operation, proper management, and asset preservation. According to the petition, the company owes approximately 44 million shekels to hundreds of suppliers and subcontractors.

The total debt is estimated at over 60 million shekels, not including a 29 million shekel debt to its shareholders. Neta Lipschitz, established in 1997 and a registered contractor with unlimited financial scope, has specialized in residential construction for three decades, primarily in Jerusalem. The company claims it has completed numerous residential and public building projects in and around Jerusalem for developers, non-profits, and landowners, as well as self-initiated projects.

Neta Lipschitz states it employs 45 workers and was profitable and stable until the outbreak of the "Swords of Iron" war. In 2023, its revenue reached approximately 142 million shekels. The company's sole active project is "Givot HaYovel Gardens" in Jerusalem's Kiryat HaYovel neighborhood, with about 80% engineering completion and an expected remaining revenue of 75 million shekels. This project involves five buildings with 226 housing units, a kindergarten, and commercial spaces.

The company argues that its frozen bank account prevents it from paying wages and subcontractors, and halting work would lead to site abandonment, eviction from the project, and loss of the remaining revenue, which is crucial for the liquidation estate. Other projects, including "Vitberg Houses," "Moradot Gilo," and "Mekor Chaim," are either completed or nearly so and are in their warranty periods.

Neta Lipschitz attributes its current crisis to the "Swords of Iron" war, which caused severe labor shortages, construction site shutdowns, and a more than 30% drop in productivity. This was compounded by old contracts signed before the war that did not account for sharp increases in construction input costs. The company's liabilities include a secured debt of approximately 15.4 million shekels to Bank Hapoalim, the 44 million shekel debt to suppliers and subcontractors, unpaid wages and employee rights totaling about 2.4 million shekels, hundreds of thousands in municipal debts, and 29.1 million shekels in owner loans.

Despite these challenges, the company asserts it remains a "going concern" with an active project nearing completion, other projects in their warranty phase, a stable professional team, and decades of reputation. Supervised operation, they contend, would yield higher returns for creditors than liquidation, prevent the forfeiture of approximately 27.6 million shekels in sales law guarantees, protect apartment buyers, and preserve employee jobs. The company's shareholders are Nathan Neta Lipschitz (75%) and Yaakov Yosef Lipschitz (25%). Attorney Shai Nachum stated that Neta Lipschitz was severely impacted by the pandemic and the "Swords of Iron" war and chose to seek rehabilitation to protect buyers, employees, and subcontractors, and to oversee the completion of the "Givot HaYovel" project under a receiver's supervision.