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Employees of the Kibbutz Matzuva textile factory have petitioned the Haifa District Court to allow them to file a request to liquidate the kibbutz.

The petition, representing 40 of the 80 factory workers, claims the kibbutz is insolvent and unable to pay its debts - including salaries and severence pay to which the workers are entitled.

Legally, the kibbutz, which is under court protection from creditors until the end of December, is an agricultural cooperative. According to the law, decisions relating to these matters must be made by the Registrar of Cooperative Societies, not the court.

However, according to the National Insurance Law, the employees can only receive the money owed to them from the National Insurance Institute (NII) if a liquidation order against the employer exists. The employees' petition asks the court to file suit in order to allow them to collect their back pay and severance from the NII.

The employees cannot file suit against the factory, as it is not registered legally as a separate company from the kibbutz, and for tax purposes is part of the kibbutz.

Most of the factory's equipment has been transferred to another kibbutz, in the Tefen area. The employees are demanding that the equipment be returned to Matzuva in order to present the factory as a going concern to potential buyers.