Veteran Israeli Construction Firm M.G.A.D Files for Bankruptcy Amid 107 Million Shekel Debt

M.G.A.D Building and Investments, a longstanding construction company operating for about 40 years, has filed an urgent petition at the Tel Aviv District Court to initiate liquidation proceedings and requested the appointment of a temporary trustee. The company cited severe cash flow distress and insolvency due to a combination of macroeconomic and industry-specific challenges, including the impact of the recent "Sword of Iron" war, a critical labor shortage, sharp and unexpected increases in construction input costs without adequate adjustment mechanisms, and heavy financing costs following interest rate hikes.

According to the petition, M.G.A.D's total liabilities amount to approximately 107 million shekels. These include debts of about 34.7 million shekels to financial creditors such as banks and credit providers, 7.2 million shekels owed to employees and tax authorities, and around 65.5 million shekels to suppliers and subcontractors. Discount Bank is among the financial creditors, represented by attorney Mor Nardiah. The company employs roughly 52 workers and is engaged in 12 active projects across Tel Aviv, Ramat Gan, Hod Hasharon, Ramat Hasharon, and other locations.

Represented by attorneys Shelly Nahum and Ahmad Atamna, M.G.A.D requested the court to appoint a temporary trustee to safeguard its assets, including projects in advanced stages, aiming to maximize returns for all creditors and prevent further damage. M.G.A.D is wholly owned by its parent company, Reshmad Initiation and Holdings, equally controlled by Assi Morad and Assi Rashad.

In a statement, the company's legal representatives expressed regret over the business collapse, attributing it to external forces and the war's severe impact rather than managerial failure. They highlighted that the halt in construction work, the sudden and acute labor shortage on sites, and the overall economic stagnation halted the company's revenue generation, leading to this business tragedy after more than four decades of operation since 1980.