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 Israeli construction company operating for about 40 years, has filed an urgent petition with 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 "Sword of Iron" war, a critical labor shortage, sharp and unexpected increases in construction input costs without adequate adjustment mechanisms, and heavy financing costs driven by rising interest rates.

According to the petition, M.G.A.D's total liabilities amount to approximately 107 million shekels, comprising about 34.7 million shekels owed to financial creditors such as banks and lenders, 7.2 million shekels to employees and tax authorities, and roughly 65.5 million shekels to suppliers and subcontractors. The company employs around 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 Initiatives and Holdings, which is equally controlled by Assi Morad and Assi Rashad.

In a statement, the company's lawyers expressed regret over the business collapse, attributing it to external forces rather than managerial failure. They highlighted the severe blow dealt by the "Sword of Iron" conflict, which halted work, caused acute labor shortages on construction sites, and froze the economy, preventing the company from generating the necessary revenue to continue operations. Established in 1980, M.G.A.D's financial crisis is described as a business tragedy resulting from force majeure circumstances.