Office Depot chain owners Ronen Levy and Rani Zim have made an ultimatium to Minister of the Economy Naftali Bennett: deliver the financial aid you promised for Office Depot, or we'll lay off the workers.
Levy acquired Office Depot a year ago for NIS 1.4 million, after it entered a stay of proceedings for the second time. The acquisition was through his Retail Group 3000, and Rani Zim later joined him as a partner by acquiring half of the shares.
The acquisition included Office Depots 32 outlets and the hiring of 650 of the chain's workers by Retail Group 3000.
When it acquired the chain, Retail Group 3000 retained Adv. Shlomo Ness, according to Levy in a proceeding vis-a-vis government ministries in which Office Depot was promised NIS 3.5 million in government aid. Levy says that this amount was for "training workers."
Levy is now claiming that despite the promises, the amount of aid promised and approved was not actually given. He said, "The Ministry of the Economy, the Ministry of Finance, and the National Insurance Institute made promises to us. Everyone lent a hand, and appeared in the headlines as saving jobs. They led us on for a year.
"I contacted the Ministry of the Economy today and said that unless we get the aid, we'll make a commotion. We sat quietly, they gave us approval, and it has been going back and forth between the Ministry of the Economy and the National Insurance Institute. We sent a letter to Bennett through our legal adviser asking him to contact us by 5 PM and let us know where it stands.
"Retail Group 3000 now has 2,160 employees, and if they don't give us the aid, we might send all of them home. We'll lay off all of them, and the state will pay them. It will cost the state NIS 400 million."
Levy asserts that he relied on the promises from the state, and therefore took a NIS 3.5 million one-year loan from Bank Hapoalim (TASE: POLI) to acquire Office Depot.
"They promised me that the money would arrive within three months. Just to make sure, I got financing for a year, but I didn't believe that we wouldn't have the money after a year. We've been warning for a month that the loan repayment date was nearing, and they're still playing ping pong with us. Now we'll see, if I don't make national insurance payments for one of the workers, whether I'll get a demand for payment with a fine within 24 hours. Now I have to sell two apartments to repay the money. That's a private injection of cash."
Levy also threatened that if the aid money is not forthcoming, "I'll file a personal lawsuit against everyone who promised to give us the aid, including former Minister of Finance Yair Lapid, Minister of the Economy Naftali Bennett, and National Insurance Institute director general Prof. Shlomo Mor-Yosef."
Published by Globes [online], Israel business news - www.globes-online.com - on January 1, 2015
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