Skal Brothers Ordered to Pay Teddy Sagi 2 Million Shekels Over Hidden Debts in Layam Sale

Sully and Meir Skal must pay Teddy Sagi's group 2 million shekels following an arbitration ruling related to the 2018 sale of Layam (LAYAM). The ruling states the Skal brothers are responsible for debts and obligations discovered after the transaction's completion. In 2018, Teddy Sagi's group acquired Layam and Skal Global Duty Free from the Skal brothers for 40 million shekels, of which 32 million shekels represented company debt assumed by Sagi. The sale agreement required the Skal brothers to indemnify the company against undisclosed liabilities and exposures prior to closing.

After the acquisition, Sagi's group found several undisclosed debts, including tax liabilities, supplier commitments, and employee claims related to the pre-sale period. Layam demanded indemnification for fines, legal expenses, and payments incurred due to these revelations. Arbitrator Moshe Luski ruled in favor of Layam and Sagi's group, finding the Skal brothers breached disclosure obligations and representations in the sale agreement. The ruling confirmed Layam's right to activate indemnity mechanisms, holding the Skal brothers liable for tax debts, employee claims, supplier obligations, and disclosure failures totaling 2 million shekels, including 1.6 million shekels plus interest and linkage.

Concurrently, Luski is addressing a counterclaim by the Skal brothers against Teddy Sagi for 2 million shekels, alleging incomplete payment for company shares despite Sagi's guarantee of buyer obligations. Sagi's group denies this claim, asserting full payment was made before share transfer as per the agreement. Layam and Teddy Sagi are represented by attorney Yoel Freilich of Gisin & Co., while the Skal brothers are represented by attorney Baruch Katzman of AYR law firm.