The court-appointed trustee for the financially-troubled Maariv daily filed an urgent court request on Tuesday to have the newspaper put up for sale and to furlough a large portion of the paper’s staff.
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The trustee, Chen Berdichev, asked for permission to put 183 of Maariv’s 550 employees, whom she deemed “not essential to maintain the company as a going concern,” on unpaid leave, adding that anyone who is placed on leave who chooses to voluntarily resign will be deemed laid off, meaning that they would be entitled to severance benefits.
Last week Maariv owner Shlomo Ben-Tzvi, who purchased the paper a year and a half ago, sought court protection from creditors for the newspaper in the face of debts of 35 million shekels ($10 million). At the time he proposed a recovery plan that would have sharply scaled back the newspaper’s operations. Early this week, the Jerusalem District Court granted the request for the protection from creditors for a two-month period. It applies to all of Ben Tzvi’s firm Makor Rishon, which owns both Maariv and his other newspaper, also called Makor Rishon. Judge David Mintz conditioned the order on an injection of 2 million shekels into the company as well as the payment of salaries to the staff at the two papers.
In a shift in position from the initial request for a stay of proceedings, Ben-Tzvi’s company consented to have both publications run by the court trustee rather than just Maariv. Tuesday’s court filing acknowledged that an initial examination showed that the prospects of financing operations at both publications from funds available to the trustee were extremely limited.
As a result, the request stated, costs must be cut as much as possible while maintaining the company as a going concern and the period of the stay should be made as short as possible. “Publication of the newspapers in a limited fashion over a long period would result in serious damage to the [papers’] brand values and in any event not allow for their rehabilitation even if ultimately an agreement with creditors is approved,” the filing noted.