Workers join chorus, blame banks, owners for company's crisis
Clubmarket's shareholders, including the Borovich family that controls El Al Israel Airlines, should invest some of their private money in Clubmarket rather than hide behind the company's limited liability and let the firm fail, the attorney representing the failing supermarket chain's employees said yesterday.
"The company's shareholders should reach into their pockets and inject new capital," Galila Horenstein said.
"We supported management's request to the court to freeze legal proceedings against the company. And if it turns out that shareholders and the banks don't immediately inject funds for normal operation of Clubmarket at all its branches, we will reconsider our actions.
"The workers are furious at the banks that extended loans to the company without restriction, and without demanding direct responsibility or personal guarantees from the shareholders.
"The workers ... paid the price, above and beyond, in an effort to ensure the company's success during the years 2002-2004," Horenstein said.
Nineteen Clubmarket branches were closed during this period, workers were fired and voluntarily retired at the branches and headquarters, and salaries were cut by 25 percent, she said.
The workers had forgone pay raises and benefits so that management could embellish its balance sheets to convince creditor banks not to raise the rate of interest they charged the chain, the attorney added.