Court Appoints Trustee for Dead Sea Cosmetics Firm Facing NIS 26 Million Debt
Translated & summarized from Calcalist by baba
The Haifa District Court has appointed attorney Yossi Mandelbaum as trustee for the cosmetics company Paloma Dead Sea, which has debts totaling approximately NIS 26 million. The court granted a stay of proceedings to allow for the company's rehabilitation and formulation of a creditors' arrangement. The company cited the pandemic, the recent war, and economic factors for its financial crisis. The trustee will explore options for the company's sale or continued operation.
The story in 5 lines · by baba
- The Haifa District Court appointed a trustee for Paloma Dead Sea due to NIS 26 million in debts.
- A stay of proceedings was granted to allow for the company's rehabilitation and creditors' arrangement.
- The company cited the pandemic, the Swords of Iron War, and economic factors for its crisis.
- The trustee will explore selling the company or its assets.
- Paloma Dead Sea, founded in 1999, sells Dead Sea products under Jericho and Paloma brands.
The Haifa District Court has appointed a trustee for the long-standing Dead Sea cosmetics company, Paloma Dead Sea, and issued a stay of proceedings at the request of the company and its shareholders. Judge Bettina Tauber ordered that the trustee, attorney Yossi Mandelbaum, continue to operate the company's business as usual during the stay period. The goal of this process is to rehabilitate the company and formulate a creditors' arrangement.
In an initial report, the trustee requested approval for a controlled operational plan for the company, which the court granted. Mandelbaum also stated he would explore options for selling the company, its shares, or its operations. Founded in 1999, Paloma Dead Sea develops and markets Dead Sea products under the Jericho and Paloma brands, selling them in Israel, abroad, and to the tourism market. Production is currently handled by an external contractor. At its peak, the company employed around 50 people.
The company approached the court last month seeking a debt arrangement, citing a cash flow crisis due to factors including the COVID-19 pandemic, the Swords of Iron War, a falling dollar exchange rate, a decline in tourism, and damage to the reputation of "Made in Israel" products. The company's external debts amount to approximately NIS 16 million, with an additional NIS 10 million in owner loans, bringing the total to around NIS 26 million. Shareholders had also deferred their salaries.
Initially, the company sought an arrangement manager, but it was later agreed to appoint a trustee. The company stated that its business operations involve two external entities: one a partner in soap operations, and the other a contractor for manufacturing, filling, and packaging. The manufacturing contractor is also among the company's creditors, though both entities operate independently and are not linked to Paloma Dead Sea's financial situation. The company claims it is the only entity among those involved that has encountered difficulties and filed for a debt arrangement.