Lusix employees get a reprieve as Landa and shareholders infuse fresh capital
The founder apologized for hardships and vowed to prioritize workers' welfare after the synthetic diamond company requested a stay of proceedings due to debts of around $28 million.
Benny Landa, along with other shareholders, Aaron Frenkel and Dudi Weisman, have agreed to inject capital into Lusix, the laboratory diamond company, to cover August salaries for all employees and provide severance pay for those who were laid off, including the cost of the 30-day advance notice.
Lusix, which is burdened with a debt of 103 million shekels (approximately $28 million), recently submitted a request to the district court for a stay of proceedings under Section 4 of the Insolvency Law. The company placed 60 of its 90 employees on unpaid leave, leading the employees, represented by attorney Ofir Ronen, to file an objection to the order. They claimed that the company had failed to pay August salaries and retirement benefits to those laid off.
In a letter to the employees, Landa stated that several Lusix shareholders had requested the court's approval to inject the necessary capital, amounting to approximately NIS 3 million. This request has already received the backing of Lusix’s secured creditors, Leumi and Discount banks, and Landa expressed confidence that the court would approve it.
Landa and Frenkel have each agreed to contribute NIS 1.5 million, while Weisman’s Gefen fund will inject an additional NIS 60,000. Landa praised Frenkel's willingness to match his contribution, noting that despite Frenkel’s limited responsibility for the company’s situation, he stepped up as a financial partner.
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In his message to the employees, Landa wrote: "I apologize to each of you for what you have endured. No one is to blame for the collapse of laboratory diamond prices in the global markets. However, the despair of the past few days could certainly have been avoided, and for that, I ask your forgiveness.
"This is the first time in my professional life that we have had to initiate legal proceedings for a company in financial distress. Although we knew that, by law, employee payments are prioritized over other creditors, we only now realize that the timing of those payments could take many months. Therefore, we are injecting new capital solely for the benefit of the employees. Beyond the financial shock, I understand you may find it hard to believe that I, Benny Landa, could abandon you, the dedicated Lusix employees, who have given your heart and soul to the company!
"As I wrote to my fellow shareholders, once I understood the situation, I found the outcome not only unacceptable but also immoral. The well-being of our employees has always been a top priority for me and a cornerstone of the company’s culture and values. Employees always come first. As shareholders of Lusix, we have a moral obligation to our employees. It is unthinkable and unethical to deny them the dignity they deserve.
"I wrote to the shareholders that, as far as I'm concerned, I cannot live with this result and invited them to join me in rectifying the situation. Some shareholders felt exactly as I did, with one even contributing beyond their share in the company’s holdings."
