Gauzy Proposes Debt Restructuring Amid Employee and Creditor Objections
Gauzy, the smart glass manufacturer, announced a debt restructuring proposal following a 98% collapse in its stock price since its IPO two years ago. The proposal comes after former employees filed for insolvency proceedings against the company due to unpaid wages. The restructuring plan includes a management buyout (MBO) in which the CEO and a group of investors would acquire control of the company.
Ahead of a court hearing scheduled for July 28 at the Tel Aviv District Court, both the 48 former employees and a major creditor, OIC Investment, submitted objections to the proposed debt arrangement. The employees, represented by attorney Lital Gal, criticized the plan as lacking a realistic recovery strategy, accusing the company of delaying tactics and hiding operational realities. They claim Gauzy has no active production lines or minimal operational infrastructure and that the CEO’s MBO proposal represents a conflict of interest, as he seeks to rescue management while buying company assets at a discount.
OIC Investment, represented by Herzog Fox & Neeman attorneys, opposes the proposal on grounds that it would immediately erase their secured liens and eliminate their creditor status without any guaranteed payment. Instead, the plan offers uncertain future repayment mechanisms tied to a potential exit event exceeding $330 million or 25% of future net profits, which OIC deems unlikely. They also argue the restructuring discriminates between secured creditors and suffers from conflicts of interest.
Both employees and OIC emphasize they are not against a proper debt restructuring but reject the current proposal as inadequate and unfair. The upcoming court hearing will address these disputes and the viability of the restructuring plan.
Summary: Gauzy’s debt restructuring proposal, involving a CEO-led buyout, faces strong opposition from unpaid employees and a major creditor who challenge its fairness and feasibility ahead of a July 28 court hearing in Tel Aviv.
