Kika workers should get April salaries on Monday; store's future murky as firm seeks a buyer
Company owes NIS 177 million, could hold liquidation sale next week.
Employees at Netanya's Kika furniture and houseware store, which closed abruptly last week because of cash-flow problems, are expected to receive their April salaries on Monday. But the store's future remains uncertain following a court hearing on Sunday.
District Court Judge Ilan Shiloh issued a temporary stay of legal proceedings until June 3, appointing two trustees for the Kika and ordering that the store's staff be paid their salaries as soon as possible. The judge's order was greeted with applause by the many employees at the hearing. One appointed trustee, attorney Ron Bar-Nir, told TheMarker he expected the staff to receive their April pay on Monday.
Many employees, though, will be out of a job if a buyer is not found for the store, a local franchise of an Austrian firm. Currently it is owned 85% by Solomon Batito and 15% by Ashtrom Properties. If a buyer isn't found soon, Kika, owned by Solomon Batito (85% ) and Ashtrom Properties (15% ), will likely hold a liquidation sale.
"We'll see over the course of the week if there is interest by investors in buying the company, and based on that, we will make a decision whether we go in the direction of a liquidation sale or continued operation," said Bar-Nir. "In any event, we will inform the public in advance about when the store will be operating and its pricing policy."
The lawyer said several parties had expressed preliminary interest in purchasing the company but no meetings with potential buyers had taken place. Sources at Kika Israel said they thought it unlikely a buyer would be found since Batito and Ashtrom had been looking for one for months without success.
The request for a stay of proceedings was filed to work out a debt-repayment plan to Kika Israel's creditors. The company owes NIS 177 million. Erez Haver, a lawyer for Bank Hapoalim, which Kika owes NIS 42.7 million, said the bank would be ready to inject about NIS 1.3 million into the store until the stay of proceedings ends on June 3, but said Hapoalim would not agree to Kika's piling up additional debt on top of that during this period. Thus, the most likely scenario is that the store would reopen next week for a liquidation sale, in which case many employees would not be called back at all. Bar-Nir also said merchandise orders from customers will be checked to see if the goods had arrived. "We don't know what the fate of various purchases will be," he said.