The Tel Aviv District Court -Israel has confirmed that the debt lawsuit filed by the joint ventures of the Honigman and Sons fashion company for the assets of the former Honigman owners, the brothers Yaakov and Micha Honigman, who are in bankruptcy proceedings, will amount to NIS 77.5 million. In doing so, the court approved the request of the liquidators, attorneys Keren Reichbach-Segal, Pini Yaniv and CPA Boaz Gazit, as well as the trustee for the Honigman brothers’ assets, Adv.

The agreements were reached after the attorney general’s representative, Adv. Alon Brill, recommended recognition of the debt. In view of the fact that many of the Honigman brothers’ assets have already been realized, it is not to be expected that the Honigman creditors will see the full amount of the claim. It is estimated that Honigman’s creditors are expected to receive an additional sum of about NIS 5 million.

It should be noted that the Honigman liquidators initially filed NIS 240 million in bankruptcy cases of the Honigman brothers. The liquidators agreed to reduce the amount of the claim because there were a number of creditors who were creditors in both the company’s liquidation case and the bankruptcy case and therefore an overlap was created.

The debt claim was filed after the liquidators claimed in a report they submitted to the court that of Honigman’s assets, inventory was a major asset in the balance sheet (about 77% of the company’s current assets), but the company’s inventory as presented in its financial reports was approx. “NIS 63 million compared to the actual stock. This inflation was carried out gradually over the years prior to the company’s collapse by its owners, managers and officials, while the company’s gatekeepers ignored basic warning signs that were supposed to raise doubts about the truth of the data.”

As stated, in recent months, a negotiation process has taken place between the trustee of the bankruptcy fund and the liquidators of the Honigman company with the involvement of the attorney general, and it was agreed that the amount of the debt approved will be NIS 77.5 million.

The Honigman chain, which was owned by the brothers Yaakov and Micha Honigman, collapsed by surprise and loudly at the beginning of 2018, when it then submitted to the district court a request to freeze proceedings with debts in the amount of NIS 235 million. Among the chain’s creditors were the banks that provided credit to it and were left with exposure of tens of shekels, tenants and more. The Honigman brothers also went bankrupt and their villas were sold for NIS 26 million.

Advocate Nadav Lev, the trustee for the Honigman brothers’ property, responded: “The trustee is happy that he was able to reduce the joint claim so that it will stand at one – third of its original amount. This reduction will allow for a higher dividend distribution to the other creditors of the Honigman brothers. The good of the creditors is before our eyes and in light of this principle, we are managing the case. “