Ailing Mega supermarket chain wins 30-day reprieve

Mega supermarket chain workers protest in Tel Aviv, on January 17, 2016. The court issued Sunday order a temporary stay of proceedings mega network. Meanwhile, the workers' council announced that Mega decided to disable the activity of all branches of the Mega on Monday. Photo by Flash90

timesofisrael

Adistrict court judge granted the struggling Mega supermarket chain 30 days protection from creditors on Monday and was expected to appoint trustees to keep the company going, find a buyer, and try to save 3,500 jobs.

Hundreds of Mega workers demonstrated outside Lod courthouse as management, suppliers and others tried to hammer out a last-minute deal to save the business.

They demanded that Avigdor Kaplan, chair of Mega’s holding company, Alon Blue Square, return the NIS 560,000 ($142,000) bonus shareholders awarded him Sunday — for many workers, the equivalent of 100 salaries.

Employees had announced they would strike starting Monday. If the court appoints trustees to keep the chain going, the workers are expected to return to the stores and receive shoppers from Tuesday morning.

The company had requested 60 days protection against creditors.

The supermarket chain, the second largest in Israel, with stores around the country, owes NIS 1.2 billion ($300 million) and is teetering on the brink of bankruptcy.

The official receiver informed the court Sunday that he favored freezing proceedings for 30 days, reports said. He also called for the appointment of a trustee who had no connection to the parties involved, and who had the “proven professional skills and ability” to steer large operating concerns.

That person would need to ensure ongoing finance and to stabilize company-supplier relations to ensure that goods were supplied seamlessly to branches countrywide.

The receiver recommended four individuals: attorneys Hagai Olman and Amit Lederman and accountants Chen Bardichev and Gabriel Trabelsi.

Mega said that some of its suppliers had announced a week ago that they would only sell stock for cash, and others had either cut back or stopped supplying to the chain entirely.

At the Alon Blue Square shareholders meeting on Sunday night, Dudi Weissman, whom Kaplan replaced in January 2015, asked for a NIS 1.35 million bonus for his work in 2014, the Calcalist newspaper reported. Weissman, who did not receive the bonus, denied the report.

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