Achievement for Papaya in the struggle against Skillz: enforcement in the USA temporarily halted
The Federal Bankruptcy Court in Delaware has granted Papaya Gaming's request for temporary relief. The ruling stays collection proceedings against the company's U.S. assets pending a Chapter 15 recognition hearing.
The Federal Bankruptcy Court in Delaware, presided over by Judge Mary F. Walrath, granted the request of Papaya Gaming for temporary relief. The decision immediately stays collection and enforcement proceedings against the company's assets in the United States, and maintains the status quo until a hearing is held on the petition for official recognition filed by Papaya under Chapter 15 of the U.S. Bankruptcy Code.
The decision in the U.S. joins a temporary stay of proceedings order issued a few days earlier in the Tel Aviv-Yafo District Court by Judge Iris Lushi-Abudi. As part of the Israeli proceeding, the court was asked to coordinate a supervised payment plan that would allow the company to continue its regular operations, alongside managing an appeal against the judgment rendered against it.
The temporary relief was granted despite vigorous opposition from Papaya's competitor, the company Skillz (currently operating under the name FIRY Inc.). During the hearing in the Delaware court, Skillz demanded that Papaya be required to deposit a significant financial bond or, alternatively, to impose restrictions on the transfer of funds outside the United States. Judge Walrath rejected Skillz's demands and accepted Papaya's position in full.
Papaya stated in response to the decision:
"We welcome the decision of the Delaware court, which grants the company the certainty required to continue its regular operations until the recognition hearing. We will continue to manage the process responsibly and with belief in the justice of our path."
Legal background: The judgment in New York and the appeal for protection
The recent legal developments follow a judgment rendered at the end of July 2026 by Federal Judge Denise Cote in the U.S. District Court for the Southern District of New York (S.D.N.Y.). The judgment adopted the jury's finding earlier this year that Papaya used automated computer programs ("bots") in skill-based games tournaments, while presenting them as human players.
As part of the judgment, Papaya was ordered to pay a sum of approximately $719 million in disgorgement, alongside approximately $10.1 million for attorney fees and court costs. At the same time, Judge Cote rejected Skillz's request for a permanent injunction that would prohibit Papaya from operating or require it to publish corrective notices in its applications.
Upon the rendering of the judgment, Papaya turned to the Tel Aviv District Court with a request for a temporary stay of proceedings. As part of the proceeding in Israel, a plan was proposed whereby the company's free cash balances and current profits would be transferred to a dedicated fund to be deposited under an authorized representative on behalf of the court, in order to ensure the rights of creditors in the event that the company's appeal is rejected. In order to prevent Skillz from acting unilaterally to seize assets in the U.S. before a decision on the appeal, Papaya filed the petition under Chapter 15 in Delaware. The current decision by Judge Walrath grants the company a legal safety net in the U.S., allowing it to continue operating its applications and game systems as usual, while it prepares to file an appeal against the judgment itself in the Federal Court of Appeals (Second Circuit).
