One of Israel’s most successful and storied soccer clubs is on the verge of bankruptcy, and appealed to the courts for a stay of proceedings.
Facing debts of more than NIS 100 million ($26 million) Hapoel Tel Aviv Football Club on Tuesday took the first step towards insolvency. It asked the court to appoint a trustee to resolve its outstanding debts.
The move means that the team’s assets have been frozen and owner Amir Kabiri will lose control of the club.
As a result, Premiership team will automatically be penalized nine points in the league, which will see them fall from its current ninth place to the bottom of the table.
The club has been struggling financially for the past decade. Kabiri, a businessman and art collector who bought the club in July 2015, said Tuesday he was unable to funnel more money into Hapoel.
“I dedicated my life to benefit Hapoel Tel Aviv,” he said, according to the Ynet news website. “This process was the most difficult I have ever experienced, but I am convinced that freezing the proceedings is the best thing that could happen. I wanted to do better, but have no other choice. I have invested almost all of my money.”
Kabiri said that he invested NIS 17 million ($4.5 million) in Hapoel last month alone, in addition to the NIS 55 million ($14.5 million) he had already given the club.
In a statement on its Facebook page Monday, the club said: “In light of the financial situation created over the past 10 years, and which was only fully revealed in recent months, the club decided that there is no alternative but to seek a stay of proceedings.”
The management of Israel’s Premier League decided to give the club NIS 1.2 million ($315,000) to pay its staff and enable the team to continue playing in the league, Ynet reported.
After the points are deducted, Hapoel will be in the relegation zone and in danger of being demoted to a lower league.
The club announced in August that it had reached a sponsorship deal with the Chinese conglomerate China Machinery Engineering Corporation (CMEC). Despite the club facing relegation, the asking price may make it an attractive target for acquisition by the Chinese group.
Hapoel has been in the top flight since the inception of the Premier League. The club won the division title 13 times, though last season it finished in eighth place. The team qualified for the UEFA Cup three times, reaching the quarter-finals in 2002.
The court gave the club until Sunday to work out a deal with its creditors.