Temporary Trustees Appointed to Rescue Israeli Construction Firm Facing 107 Million Shekel Debt

The Central District Court judge, Hanna Kitzis, has appointed attorney Hovav Biton and accountant Omer Sarvinsky as temporary trustees for M.G.A.D. Building and Investments, a veteran Israeli construction company operating for about 40 years. The company has accumulated debts totaling 107 million shekels and recently requested urgent court approval to initiate liquidation proceedings and appoint trustees due to severe cash flow problems and insolvency.

M.G.A.D. cited a combination of macroeconomic and industry-specific challenges as reasons for its financial distress. These include the economic fallout from 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. The court authorized the trustees to seize, safeguard, and secure the company’s assets.

The company’s liabilities break down to 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. Discount Bank is among the financial creditors, represented by attorney Mor Nardia. 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.

Represented by attorneys Shelly Nahum and Ahmad Atamana, the company emphasized that the appointment of trustees aims to preserve assets, including projects in advanced stages, to maximize returns for all creditors and prevent further damage. M.G.A.D. is wholly owned by Rashmad Initiatives and Holdings, equally controlled by Assi Morad and Assi Rashad. Nahum and Atamana noted that the company’s collapse is a tragic consequence of external forces, particularly the war, and not due to managerial failure. Following the trustees’ appointment, the controlling owners are currently meeting with them to provide full cooperation.