Veteran Israeli Construction Firm M.G.A.D Files for Bankruptcy Over 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 about 34.7 million shekels owed to financial creditors such as banks and credit providers, 7.2 million shekels owed to employees and tax authorities, and roughly 65.5 million shekels owed to suppliers and subcontractors. The company employs around 52 workers and is currently 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, Rashmad Initiatives and Holdings, which is 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 rather than managerial failure. They highlighted that the outbreak of the "Sword of Iron" conflict severely disrupted operations by halting work, causing acute labor shortages on construction sites, and freezing the economy, which prevented the company from generating necessary revenues to sustain normal operations. The firm, established in 1980, succumbed to these extraordinary external circumstances and force majeure events.