Nekudat Teva Health Food Chain Shuts All Stores with 14 Million Shekels in Debt
The Nekudat Teva health food chain in Israel has closed all nine stores and filed for a stay of proceedings with 14 million shekels in debt, citing the prolonged reserve duty of its co-owner in Gaza and economic pressures.
The "Nekudat Teva" organic food and health product retail chain has abruptly closed all nine of its physical stores across Israel after plunging into severe financial distress with debts amounting to 14 million shekels. The 12-year-old company filed an urgent motion for receivership and a stay of proceedings with the Tel Aviv District Court to formulate and approve a creditors' settlement.
Financial Collapse and Military Reserve Duty
According to the legal filing submitted by Dr. Adv. Omer Nirhod, the group employs 38 workers and operates both physical branches and an online e-commerce platform. One of the co-owners, Yehonatan Frank, has been serving in active military reserve duty almost continuously since the outbreak of the "Swords of Iron" war, spending approximately 200 days on duty in Gaza. The combination of his prolonged absence, the mobilization of key personnel, fierce market competition, and fixed operating costs that failed to adjust to declining revenues drove the companies into heavy losses.
"The company fell into financial difficulties following a prolonged crisis — first the COVID-19 pandemic and subsequently the state of emergency and the extensive reserve duty of its manager," stated Dr. Adv. Omer Nirhod.
Settlement Proposal and Future Outlook
To mitigate the crisis, shareholders Frank and Bar Kaplan injected 4.8 million shekels of private funds and loans over the past two years. However, following a recent economic assessment, the decision was made to immediately shutter the stores and seek legal protection to prevent asset looting. While liabilities stand at 14 million shekels, total assets available for distribution are estimated at 8 million shekels.
The proposed settlement aims to repay secured creditors 100% of their debt, personal guarantee creditors 62%, and unsecured ordinary creditors 35%. Additionally, management noted that several competitors have expressed interest in acquiring the business, highlighting that swift action by an appointed trustee could preserve jobs and maximize returns for creditors.
