47 employees of the startup company Infibond applied to issue a company freeze order

47 employees of the startup company Infibond applied to issue a company freeze order under the Insolvency and Economic Rehabilitation Act because they had not been paid since January. After an urgent hearing, Tel Aviv District Court President Eitan Orenstein ruled that the order would be granted, but as of now, the company will continue to operate as the data it presents attest to the existence of potential investors and customers and a real possibility of reconstruction.
The company, which deals with artificial intelligence in clinical psychology, was founded in 2013. The Corona crisis gave its signal right at the beginning, and since January it has not paid workers wages and social rights. Employees emphasized that they are in real financial difficulties and since they have not been laid off or issued to the UAE, they are not eligible for unemployment benefits.
In response to a request filed by the employees, the company claimed that the Corona crisis had brought it into flow difficulties, but the company's executives were working hard to raise funding. The company noted that recently, after tremendous efforts, it has been able to find an investor who is expected to raise about $ 10 million in about three months and additional capital.
The company noted that it did not object to the issuance of the order but sought to settle for an observer to oversee its operations and fundraising, as a loyal appointment at this stage could put pressure on investors. The company added that as of today, it is in the process of selling its products to international companies, and is expecting substantial revenue in the coming years.
In light of the situation, President Orenstein held an urgent hearing in which he listened to the workers' arguments, stating that they did not oppose the appointment of an observer, as long as it did not harm their ability to apply for Social Security and receive unemployment benefits. However, the Commissioner of Insolvency Law stated that an observer could not be appointed as the law requires a trustee appointment upon issuance of a court order. It also offered a list of five possible trustees. .
Judge Orenstein noted that while the company has suffered a cash default, its assets value exceeds its liabilities, so that in its equity aspect it is not in default. The judge referred to documents that testified that the company was in fact contracting with clients and investors, and had taken action to delay various payments, including rents.
In these circumstances, the judge noted that at this stage there is still a possibility of rehabilitation that should be exhausted, given that one of the main purposes of the law is the rehabilitation of debtors. He added that the new law allows for the temporary operation of the company to enable it to continue its recruitment and sale operations.
However, it was held that the law does not allow to appoint an observer company but accepts the company's request to appoint the founder as trustee. This appointment, he noted, would allow him to work with potential investors and save the valuable time it would take for an outside trustee to study the company's operations and get to know its potential investors.
Also, and in accordance with the law, the judge appointed an attorney from the list of nominees recommended by the supervisor, who will serve as additional trustee.