Final edition of free paper 'Israeli' goes to press today

The free newspaper Israeli is poised on the brink of closure. TheMarker has learned that Hirsch Media, owned by businessman Shlomo Ben-Zvi, has run out of money and that today's edition of the daily paper will be its last.

The paper is handed out free at such locations as bus and train stations, as well as malls and other business centers. Its daily press run has been about 150,000 copies.

Yesterday morning the employees of Israeli filed a motion to liquidate the company, and asked for the appointment of a temporary receiver, accountant Chen Bardichev.

Represented by attorney Alon Hornstein, the workers claim that the company that publishes Israeli is bankrupt and that the only way to save it and sell it as a going concern is by the appointment of a temporary receiver.

Hirsch Media also publishes Makor Rishon and Hatsofe, both of which are identified with the religious community.

Ben-Zvi refused to comment.

Earlier this week Newsco, a company owned by billionaire Sheldon Adelson, sued in Tel Aviv District Court for the liquidation of the company. Adelson stopped providing funding for Israeli as of January 1. The workers joined Adelson in his request to the court.

Adelson had founded Israeli together with Ben-Zvi. But several months ago, a legal dispute broke out between the two, when Adelson claimed that Hirsch Media had been skimming income from Israeli to help finance its other publications. Adelson claimed that Ben-Zvi had taken NIS 11 million from the paper illegally. He asked that a special manager be named. The court agreed, but Adelson's company Newsco then claimed that Hirsch Media was not cooperating with the manager, for instance by withholding documents. Adelson therefore cut off funding from the start of the year, saying he had provided the paper with a $8.4 million loan in the past.

The workers claimed in their request that the special manager had informed them that neither Adelson or Ben-Zvi had any responsibility to pay off the paper's previous debts, including wages. Employees also claimed that the newspaper's agreement with Israel Railways - one of its most valuable assets - was on the verge of cancellation, because the paper has not paid the railways a NIS 1.5 million debt due on January 4.

Also, workers were asked to return their cars leased by the paper, including those used for delivering the newspapers. The deadline for returning the vehicles to the leasing company was yesterday at 1 P.M. In addition, dozens of the paper's computers were repossessed in recent days. Only a refusal by the workers prevented the company's computer servers from being removed, as well.