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The judge also ordered the issuance of an order to open proceedings to the network for the purpose of rehabilitating the activity. The judge also issued a restraining order that would not allow creditors to open and conduct legal proceedings against the chain and its shareholders. The order to open the proceedings was issued after the chain, through Adv. Hovav Bitton, reached agreements with the banks that are secured creditors – Bank Hapoalim, represented by Adv. Amir Palmer and Eviatar Kramer, and Bank Mizrahi Tefahot, represented by Adv. Amit Pines.
During the court hearing yesterday, Advocate Lisa New representing employees at the network noted that “it is very important to pay the salaries as soon as possible, all employees are on standby. Most of the workers are in fact workers, some of them single mothers, pregnant women who have difficulty paying mortgages and renting to the point of buying basic things for their children. ”
The chain employs about 80 people and previously operated 29 branches. The discussion revealed that the chain currently operates 12 branches and a website. Some of the branches are franchised (there are no claims against the franchisees) and some are in partnership.
It should be noted that the chain initially submitted a request to delay proceedings without issuing an order to initiate proceedings under Amendment 4 to the Insolvency Law, which is a procedure that assists businesses that have run into difficulties due to the corona, in which a trustee is not appointed. Eventually, the request in the same procedure was canceled and the network submitted a new request for an order to open proceedings, in the framework of which a trustee is appointed who takes over the management of the company. The chain claims that the corona crisis has hit the companies’ profitability, both due to the ban on holding celebrations and due to restrictions.
The chain began in 1998 in a clothing store in the city of Afula called the “Fashion Line” – a clothing store from which Galit grew and grew more than 25 years ago, until the business expanded and the Galita brand was built in the name of chief designer Galit Malkin. The chain offers fashionable items for the evening, from dresses designed for events to everyday items. At the end of 2017, the company began operating an online sales site, where the customer can “measure” the item of clothing in electronic imaging – a technological innovation in which the chain has invested significant changes. The market segment to which the chain addresses its products is targeted at young women aged 18-36, and in this market segment, the chain claims to have invested considerable resources.