Or City Real Estate, Inbal Or's group of companies, today announced a series of immediate economizing measures "in preparation for an arrangement with the financial institutions," company spokepersons said.
According to the company's announcement, the streamlining measures include "a dramatic cut in advertising by the company and its subsidiaries, discharging 20% of the company's personnel and that of its subsidiaries, slashing its office space, and the appointment of a professional manager for putting its commercial relations with the financial institutions in order."
The company also stated, "The company's financial situation enables it to carry out a difficult arrangement, but there is no doubt that the media reports are becoming a tool in the hands of parties attempting to damage the company. Carrying out the economy measures will enable the company to comply with Judge Orenstein's instructions and gradually return to regular operations."
In recent weeks, Or City and its owner have been in a difficult situation, after the Israel Tax Authority revealed that it was conducting an investigation into the company, and arrested Or and the company CFO. Or was under house arrest until last Sunday, and was barred by court order from leaving Israel. At the same time, since the affair involving the Tax Authority was revealed, a number of court claims have been filed against the company asking for Or to be declared a bankrupt, among other things.
Or City has fancy offices in the Azrieli Towers in Tel Aviv. Up until now, the court has issued no order requiring the company to economize, and the announcement released in Or City's name today raises the question of what direction the company is headed in. The company said its measure did not indicate a downturn in its fortunes, and was aimed at dealing with the situation facing the company.
Nevertheless, questions about the company's future are arising, in view of yesterday's hearing at the Tel Aviv District Court, in which Tel Aviv District Court Judge Eitan Orenstein criticized the conduct in the Metzitzim project of Inbal Or, who is suspected of selling the same apartment to two different customers, and the negative comments by Mizrahi Tefahot Bank (TASE:MZTF) lawyer Advocate Amit Pines, who said that checks totaling millions of shekels had not been honored.
"We're in a worse state every day," Pines said, noting that Or herself had personally guaranteed all the accounts at the bank, and that her debt exceeded NIS 17 million: NIS 9 million from the commercial accounts and NIS 8 million from her personal account.
Published by Globes [online], Israel business news - www.globes-online.com - on March 17, 2016
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