Best Restructuring & Insolvency Lawyers in Herzliya

About Restructuring & Insolvency Law in Herzliya, Israel

Restructuring and insolvency law in Herzliya, Israel, refers to the legal framework that handles situations when individuals or businesses are experiencing financial difficulties. These laws regulate processes for debt restructuring, bankruptcy, liquidation, and insolvency proceedings. The aim is often to allow viable businesses to continue operating while fairly addressing creditor claims or, in the case of insolvency, to maximize returns to creditors. Located in Israel's business hub, Herzliya has many companies and individuals who may need advice and representation when faced with financial distress. Understanding your rights and obligations, as well as the legal tools available, is key to navigating these challenging situations.

Why You May Need a Lawyer

Legal issues surrounding restructuring and insolvency can be complex and can have significant consequences for individuals and businesses. Common scenarios where legal help is crucial include:

• When your business is facing severe financial hardship and requires debt restructuring or protection from creditors.
• If a creditor is seeking to initiate insolvency or bankruptcy proceedings against you or your company.
• When you need to negotiate with lenders, suppliers, or other creditors to reach agreeable payment terms.
• If you wish to voluntarily initiate insolvency proceedings for liquidation or reorganization.
• If you are a creditor seeking to recover funds from an insolvent debtor.
• When you are facing legal actions such as debt enforcement, asset freezing, or foreclosure.
• If you have personal guarantees connected to loans or company debts.

A lawyer can help protect your interests, ensure compliance with relevant procedures, and potentially help you avoid further liability or losses.

Local Laws Overview

Israeli restructuring and insolvency law is governed mainly by the Insolvency and Economic Rehabilitation Law, 5778-2018. This law unified and modernized the previous bankruptcy and company liquidation statutes, aiming to provide more efficient and fair solutions for financially distressed individuals and businesses. Key aspects particularly relevant in Herzliya include:

• Automatic Stay of Proceedings: Once insolvency proceedings are initiated, there is an automatic freeze on most legal actions and enforcement measures against the debtor.
• Economic Rehabilitation: The law places emphasis on rehabilitating viable debtors, favoring restructuring over liquidation when possible.
• Creditor Hierarchy: Local law outlines the order in which creditor claims are paid, with secured creditors and certain employee entitlements having priority.
• Individual and Company Procedures: Different procedures apply to individual debtors versus companies or partnerships.
• Trustee Appointment: A trustee or liquidator may be appointed by the court to oversee the process, manage assets, and develop a recovery or liquidation plan.
• Debt Discharge: Criteria for debt release following completion of insolvency proceedings are detailed in the law.
• Cross-Border Issues: In Herzliya, where many businesses operate internationally, cross-border insolvency and recognition of foreign proceedings can be relevant.

Court proceedings are usually handled in the district court closest to the debtor's registered office or primary residence. In Herzliya, this would generally mean the Tel Aviv District Court has jurisdiction.

Frequently Asked Questions

What is the difference between restructuring and insolvency?

Restructuring involves negotiating new payment terms, reorganizing business operations, or otherwise adjusting debts to allow a business to recover. Insolvency refers to the legal status of being unable to pay debts as they come due, often leading to formal proceedings like liquidation or rehabilitation.

Do I need to be completely bankrupt to file for insolvency in Herzliya?

No, you do not need to be fully bankrupt. If you are unable to meet your debts as they fall due or your liabilities exceed your assets, you may be eligible for insolvency proceedings.

Can individuals as well as companies undergo insolvency proceedings?

Yes, both individuals and corporate entities can initiate insolvency or restructuring proceedings under Israeli law, though the procedures and implications differ.

What protections do insolvency proceedings provide?

Once proceedings begin, creditors are generally prevented from taking action to recover debts, sue, or seize assets without court approval.

How long do insolvency proceedings usually take?

The timeline varies based on case complexity, but individual insolvency may last several months to a few years. Corporate restructuring or liquidation may take even longer, especially for large businesses.

Will my assets be sold during insolvency?

Not automatically. In rehabilitation, efforts focus on preserving the business. In liquidation, assets may be sold, but certain assets are protected or excluded, especially for individuals.

Can I run my business during restructuring?

In many cases, business owners remain in control during restructuring, but significant decisions often require court or trustee approval.

What happens to employee rights in insolvency?

Employees enjoy certain priority in insolvency, and in some cases, the National Insurance Institute covers unpaid wages, subject to legal limits.

How does the court get involved?

A district court oversees formal proceedings, approves arrangements, appoints trustees or liquidators, and resolves disputes.

Can foreign creditors participate in insolvency proceedings?

Yes, foreign creditors can file claims and participate in the process, and Israeli courts may cooperate with certain foreign jurisdictions.

Additional Resources

If you need more information or assistance with restructuring and insolvency in Herzliya, the following resources may be helpful:

• Israeli Ministry of Justice - Department of Insolvency Proceedings provides guidance and manages official bankruptcy and restructuring processes.
• Tel Aviv District Court - Handles most insolvency and restructuring cases in Herzliya.
• Israeli Bar Association - Offers directories of certified lawyers specializing in insolvency and restructuring.
• National Insurance Institute (Bituach Leumi) - Information for employees about wage protection during employer bankruptcy.
• Nonprofit organizations - Some NGOs offer counseling and support services for people facing financial distress.

Next Steps

If you believe you may need legal assistance with a restructuring or insolvency matter in Herzliya, it is important to act quickly to protect your interests. Start by collecting all relevant financial documents, such as contracts, loan agreements, and creditor correspondence. Then consider contacting a qualified lawyer who specializes in restructuring and insolvency cases in Herzliya or the wider Tel Aviv district. Your lawyer can review your situation, explain your options, and represent you throughout the legal process. Do not ignore letters or legal actions from creditors, as early intervention often provides better results. Lastly, stay informed and make use of local resources and official channels for guidance or support during this difficult time.