Haifa Court Approves Rehabilitation Plan for A.M.C. Shemesh Amid 1.25B Debt
Haifa District Court approved a rehabilitation plan for infrastructure firm A.M.C. Shemesh despite 1.25 billion shekels in debt claims, prioritizing key public transit projects over liquidation.
The Haifa District Court has approved the rehabilitation and continued operation plan for the infrastructure company A.M.C. Shemesh (1990), despite the company facing debt claims totaling approximately 1.25 billion shekels. Deputy Court President, Judge Bettina Tauber, ruled that continuing the company's operations is preferable to liquidation, noting its critical involvement in public sector projects for entities including Netivei Israel, NTA, and Israel Railways.
The company, owned by Mahdi Abu Moch and Zahdi Abu Moch, entered insolvency proceedings in January to formulate a recovery plan. According to the ruling, the financial difficulties stemmed from project delays, the burden of financing subcontractors, gaps between work execution and receiving payments, and rising financing costs. In February, Adv. Liza Hadash and CPA Chen Berdichev were appointed as the company's trustees.
Rehabilitation Plan and Funding
The approved plan is based on the continued execution of existing projects under the supervision of the trustees, with revenues from the work and the realization of project rights serving as a primary source for creditor repayments. Additionally, it was determined that the company will transfer 1% of its revenues for 5 years to support the arrangement, alongside the liquidation of assets belonging to the shareholders and guarantors. The Abu Moch family also provided an additional sum of about 2 million shekels toward the settlement.
At this stage, however, the exact payout for each creditor from the submitted debt has not been finalized. The court noted that some of the debt claims are contingent and may decrease following the completion of projects, including obligations related to performance guarantees and maintenance periods. Among the creditors and entities with significant debts are Hachshara Insurance, Ayalon, Mizrahi Tefahot Bank, and the credit company Melleren, alongside various suppliers and service providers.
National Importance and Avoiding Liquidation
Judge Tauber emphasized that the company's activities carry national significance due to the urgent need to complete public infrastructure projects. She stated that liquidation could lead to halted projects, employee layoffs, damage to suppliers and subcontractors, and the forfeiture of bank guarantees.
"Continuing the company's operations provides a far better alternative for creditors than liquidation, safeguarding public interests and ensuring the completion of vital infrastructure," Judge Tauber noted in her ruling.
Accordingly, the court ruled that the rehabilitation plan offers creditors a superior alternative to liquidation and officially approved the arrangements as a binding judgment.
