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Textile Mills in Haifa Ordered Shut Unless Buyer Can Be Found

April 26, 1985
See Original Daily Bulletin From This Date

The Haifa District Court ordered the bankrupt Ata textile mills complex on Haifa Bay to cease operations by May 15 unless a buyer can be found before then for the financially distressed enterprise.

Ata is the largest single employer in the Haifa area and its shut-down will mean dismissal for thousands of workers. Pinchas Grub, chairman of the Ata workers committee, warned only last week that there was a danger of unrest, even rioting, if the employes received sudden dismissal notices.

The court order Monday came as a surprise to Eliezer Peleg, a textile magnate named by the government earlier this year to act as receiver for the ailing firm and try to find a suitable buyer. Peleg indicated on a radio interview that he expected the court to allow him more time, if only to avert mass dismissals.

Peleg has been negotiating with the Clal Finance Co. and the Kitan cotton factory to agree on a buy-out price that would satisfy the Bank Leumi, Ata’s principal creditor. But the court informed Peleg yesterday that he should be prepared to dismiss the workers and close the mills on May 15. He was instructed to hire a security company to guard the mill property.

Peleg said he was hopeful that a reassessment of the value of the real estate involved would persuade Bank Leumi to accept the latest offers made by potential buyers.

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