Israeli Construction Firm M.G.A.D. Appoints Trustees Amid 107 Million Shekel Debt Crisis

The Central District Court judge, Hanna Kitzis, appointed attorney Hovav Biton and accountant Omer Sarvinsky as temporary trustees for M.G.A.D. Building and Investments, a veteran Israeli construction company with about 40 years in the industry. The company, which recently requested urgent court approval to initiate liquidation proceedings, disclosed debts totaling 107 million shekels. These include approximately 34.7 million shekels owed to financial creditors such as banks and credit providers, 7.2 million shekels to employees and tax authorities, and 65.5 million shekels to suppliers and subcontractors. Among the creditors is Discount Bank, represented by attorney Mor Nardiah.

M.G.A.D. employs around 52 workers and is engaged in 12 active projects across Tel Aviv, Ramat Gan, Hod Hasharon, and Ramat Hasharon. The company cited severe cash flow problems and insolvency caused by a combination of macroeconomic and sector-specific factors, including the impact of the "Sword of Iron" war, acute labor shortages, sharp and unexpected increases in construction input costs without adequate adjustment mechanisms, and heavy financing costs due to rising interest rates. The court authorized the trustees to seize, safeguard, and secure the company’s assets.

Represented by attorneys Shelly Nahum and Ahmad Atamneh, M.G.A.D. emphasized that the appointment of trustees aims to protect ongoing projects at advanced stages and maximize returns for all creditors while preventing further damage. The company is wholly owned by Rashmad Initiatives and Holdings, equally controlled by Assi Morad and Assi Rashad. Nahum and Atamneh stated that the company’s financial collapse is a tragic consequence of external forces and force majeure, not managerial failure. Following the trustees’ appointment, the controlling owners are currently meeting with them to provide full cooperation.