Approval of creditors' deal gives hope to Clubmarket's future
Tel Aviv District Court Judge Varda Alshech approved the creditors' arrangement for Clubmarket yesterday, saving the collapsed supermarket chain from liquidation.
The deal was made possible when Tax Authority and the trustees running Clubmarket reached an agreement to allow the court to decide three key disputes. The main dispute is whether the Tax Authority would receive 100 percent of what Clubmarket owes it, rather than making do with only a portion of that amount like other creditors. Another dispute involves whether VAT is owed on the chain's debts that will never be repaid. The third deals with National Insurance compensation for Clubmarket employees.
To assure the authority's rights, the trustees agreed to deposit NIS 52 million into a special creditors' fund.
Alshech said that the arrangement begged for immediate approval in order to release money to suppliers, some of which have been in danger of collapse since the bankruptcy declaration. The fact that the fiscal year is about to end makes the situation even more urgent, the judge added. She said she only regretted that the parties had not reached an arrangement earlier.
However, Alshech has not yet ruled on another agreement between Clubmarket's former owners, the Borovich-Mozes-Rosen group, and the suppliers. The owners had offered to pay NIS 15 million into the trustee account in exchange for an exemption from future claims.
In her ruling, Alshech was particularly scathing over the NII's role in delaying the accord. "I cannot lay down my pen without making a few comments about the NII's conduct, which was far from satisfactory," she wrote. "I have tried and failed to understand how any party could on one hand deny its obligation to pay into the trustees' fund, and at the same time demand in advance that money in the fund be reserved for it... This is astonishing because it has decisive significance for many of Clubmarket's creditors, some of which are in danger of collapse and are [therefore] liable to impose a burden on the National Insurance Institute's own coffers."