Bagir files for creditor protection as business review continues
Troubled tailoring specialist Bagir has taken steps to protect itself from its creditors as it faces a cash crunch due to the impact of the coronavirus on its primary markets, the UK and the US.
The Israel-based company had said earlier that it was running out of cash. On Tuesday, it said it had reviewed its options and has filed an application to the District Court in Beer-Sheva, Israel, for an order in accordance with Section 18 of The Insolvency and Economic Rehabilitation Law 2018. It’s applied for “a temporary stay of proceedings against the company, appointment of a trustee and other relief”.
Appointment of the trustee was requested to assess, during a period of 30 days, “the feasibility of maintaining the group's business and assets and/or the optimal manner of their realisation”.
For now then, there’s a prohibition on all disposals of the company's assets; any transaction not in the ordinary course of business; the start or continuation of legal proceedings against the firm; the discharge of its past debts; and the realisation of assets.
The court is expected to rule on the application by April 20 and the company's shares will remain suspended from trading on the London Stock Exchange.
The latest development follows a troubled several years in which it struck a deal to be taken over by Shandong Ruyi but later launched legal action as that deal and the funding that would have come with it failed to complete.
Earlier this year it had been relatively upbeat, talking about having signed some major orders with key retail clients. These orders will have evaporated under the pressure of the coronavirus crisis, of course.
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