Partner's Debt Arrangement Approved, Company to Continue Operations
Translated & summarized from Globes by baba
The debt arrangement for Partners, a company renting offices to lawyers, has been approved by the court, allowing it to continue operations. The plan requires shareholders to inject 3.7 million shekels and involves payments totaling approximately 6.3 million shekels to creditors over five years. The company cited the pandemic, security events, and economic factors for its financial difficulties. The arrangement aims to preserve the company's assets and services.
The story in 5 lines · by baba
- Partners' debt arrangement approved, allowing company to continue operations.
- Shareholders to inject 3.7 million shekels, with 100% creditor agreement.
- Total payments to creditors to reach approximately 6.3 million shekels over five years.
- Company cited pandemic, security events, and economic slowdown for financial issues.
- Arrangement aims to preserve company's reputation, client base, and employees.
The debt arrangement for Partners, a company providing office rental services to independent lawyers, has been approved by the court, allowing it to continue operating as a "going concern." The company faced significant financial difficulties, leading to a request for proceedings to be stayed for the purpose of formulating a debt arrangement. The approved arrangement, agreed upon by 100% of the creditors, includes an immediate cash injection from shareholders and payments spread over five years from the company's revenue.
The settlement plan involves immediate payments, installments from the company's ongoing operational income, existing cash reserves, and deferred payments to Bank Leumi and Mishkol. A total of approximately 6.3 million shekels will be transferred to the creditors. The company's operations will be fully managed by its shareholders starting October 31st. Shareholders are injecting 3.7 million shekels, with an initial 550,000 shekels already transferred.
Partners, which served around 600 independent lawyers, cited several factors contributing to its financial distress, including the COVID-19 pandemic, security events since October 7th, rising interest rates, and a slowdown in office demand. The mobilization of lawyers for reserve duty also reduced their income, leading some to terminate their contracts with Partners.
Initially, Partners blamed Sela Capital, its landlord, for its financial woes, claiming an overpriced lease agreement and Sela Capital's refusal to lower rents or return guarantees. Following legal discussions, Partners was released from the contract with Sela Capital, which then leased the floors to another tenant. Partners currently operates from other rented offices in Tel Aviv.
The approved arrangement aims to preserve the company's reputation, client base, and commercial agreements, while retaining most of its employees and ensuring service continuity for its clients. The plan incorporates efficiency measures, financing sources, and contributions from the company and its shareholders, alongside creditor concessions.