"Green light" for settlement: Court appoints manager for Papaya Gaming and freezes proceedings

The Tel Aviv-Yafo District Court, presided over by Judge Iris Lushi-Abudi, has accepted Papaya Gaming's request for the appointment of a settlement manager and a temporary 45-day stay of proceedings.

As part of the decision, the judge appointed Adv. Gil Oren from the Yigal Arnon firm as the settlement manager. He will work to formulate a debt settlement plan and present it to creditors at upcoming meetings. The stay of proceedings was granted to allow for the formulation of this settlement within the specified timeframe.

On behalf of Papaya Gaming, it was stated:

"We welcome the court's decision, which constitutes another significant achievement for Papaya Gaming and provides the company with the certainty required for the continuation of its regular operations. We will act in full cooperation with the settlement manager to promote an optimal settlement, and we will continue to manage the process responsibly and with belief in the justice of our path."

The Israeli ruling complements the decision of the Delaware court, which approved the company's request for temporary relief and stayed collection and enforcement proceedings against it in the United States, despite opposition from Skillz.

During a hearing held yesterday, the judge clarified to the parties that the settlement must be based on a combined model, incorporating not only ongoing business activity but also owner contributions and an examination of potential investor interest. This is aimed at increasing and ensuring the repayment forecasts for the debt determined by the US court, which imposes a $718 million compensation obligation on Papaya Gaming. The company intends to appeal the US court's decision.

In her ruling, the judge noted that "the companies seek to offer a debt settlement to their creditors that will ensure repayment of up to 100% of the debts, despite cash flow insolvency." The proposed settlement includes "continued operation of the companies while keeping their profits in a special fund that will be managed by the settlement manager for 7 years."

She added that the current details of the settlement rely "on income from continued activity only, with all the risks involved, without guarantees and without an owner contribution. Therefore, I believed that the applicants should improve the settlement and present a model that will combine income from continued activity as well as from additional sources."