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Will the Insolvency Law Amendment Help Businesses?
Not sure
Adv. Shlomo Ness, an expert in rehabilitation and corporate recovery, explains to Anat Davidov in her program on 103FM that the economic crisis is far from over and that the worst is yet to come. "There is uncertainty about the ability of businesses to return to activity."
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Insolvency
Corona
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Wednesday, 03 March 2021, 18:02 Updated: 18:11
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Store opens after closure (Photo: Reuven Castro)
The Knesset plenum this morning (Wednesday) approved the proposal to amend the Bankruptcy and Economic Rehabilitation Law, which is supposed to help business owners who have been affected in the past year as a result of the Corona crisis.
But will the amendment to the bill really help business owners whose financial situation is difficult?
Adv. Shlomo Ness, an expert in rehabilitation and recovery of companies, spoke with Anat Davidov on 103fm and expressed his opinion on the matter.
"A state of insolvency is a situation in which a body is unable to repay its debts and is at risk of liquidation or bankruptcy," explained D. Ness.
"Unfortunately, as a result of the Corona crisis, a very large part of the Israeli economy is in such a situation, first and foremost the same sectors that closed them and stopped their activities such as restaurants, tourism, hotels, banquet halls and more.
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"Those affected sectors are in a state of uncertainty about their ability to return to action, how much and when," said Advocate Ness, referring to the problems behind the amendment to the law. "This amendment hardly helps those industries, because according to the amendment, for it to be possible Something, the business owner should offer an arrangement to the creditors how he intends to pay his debts, and within 3-4 months do so.
But some business owners do not know how to propose an arrangement, because they do not know when they will resume operations and to what extent.
"These sectors employ hundreds of thousands of workers, whether it is the tourism industry that employs over 250,000 people, or the ballroom industry that indirectly employs more than 100,000 people," said Adv. Ness. "Hundreds of thousands of workers are currently in the IDF. "And instead of bringing them back, and helping businesses get back on track and grow the economy, they have not been given a solution until now, leaving them on the verge of collapse."
In conclusion, Adv. Ness expressed his appreciation for the consequences of the current economic crisis, arguing that evil is still ahead of us. “At the economic level, the great crisis has not yet begun.
With the deferral of credit in recent months, and the grants given to citizens, everyone has rolled over so far and tried to see what happens, "he argued." In the coming months we will start to see the crisis massively.
The Ministry of Justice and the Ministry of Finance estimate that tens of thousands of businesses will collapse, but no one knows the exact number.
"Still, there are steps that need and must be taken," attorney Ness recommended to business owners.
"There is an opportunity here to reorganize internally and carry out streamlining processes, which can improve the situation when the business returns to activity. We must look for ways, and consult how to improve the business' ability to improve and return to full activity. Unfortunately, the amendment I hope that in the existing ways and together with some sympathy from the courts, banks and other bodies, it will be possible to get the business back on track. "
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