Some 10 stores belonging to the Israeli women's apparel chains Jump and Matim Li, both owned by Avi Malka, were told on Monday they had to vacate their space in malls belonging to the Azrieli Group.
Another major mall operator, Melisron, petititioned a court to evict the stores from its malls as well.
Meanwhile, 60 employees of Jump and Matim Li, which sells large sizes, petitioned the Central District Court to sell the retail group to a third party to keep it a going concern. The employees said they are owed some NIS 5 million in back pay, social benefits payments and severance pay from October.
"It's sad," said Azrieli Group CEO Arnon Toren. "Avi Malka told me that he wasn't managing the business for the past year and that Office Depot dragged him under. It's just a manner of poor management, because Matim Li and Jump do fine at most locations." Toren said it was likely the two apparel chains would be sold.
Malka went heavily into debt acquiring Office Depot Israel for NIS 42 million in February, a takeover that was frozen after a check written to Office Depot's trustees bounced. Malka's fashion group owes NIS 110 million to banks and suppliers.
On Sunday evening, Malka informed banks, credit card companies and other relevant parties that efforts to save the company had failed and that he would allow creditors to take over to recover their money.
In a letter, Malka detailed some of the efforts he made to reach an agreement with creditors and blamed the inability to reach an agreement on the refusal of Israel Credit Cards-Cal to release money he needed to pay employees. Cal responded that it had, in fact, agreed to provide the money but only after it could be verified that it would be used for paying salaries and the move was approved by the court.