Israel Canada Does Not Commit to Hiring 500 Brown Hotel Employees

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The Israel Canada hotel chain is not obligated to employ the 500 employees of the Brown Hotels chain if the sale of the network's operations is approved by the court.

From the request submitted to the Tel Aviv District Court, it appears that Israel Canada is not previously committed to employing the network's employees - who may soon find themselves without work.

It also emerges that among the debts estimated at about 980 million shekels of the Brown chain, there is a debt of approximately 39 million shekels towards Menora Mivtachim Insurance, which Israel Canada will have to clear. There is an additional debt towards Menora that will be settled from the financial proceeds and other sources, according to the request submitted by Brown to the court.

By the way, Nir Weizman, one of the owners of the Brown network, writes in a court affidavit, among other things, that "Brown is part of an international hotel chain, which has brought a new message to the boutique hotel sector by being modern, designed and stylish. The uniqueness of the group lies in each hotel being meticulously designed and offering a different and exceptional experience to the guests." 

The Debts of Brown

As we published, according to Brown's request to approve the deal, the group has a debt to financial creditors amounting to a total of about 785 million shekels, among them is businessman and hotelier Yakir Gabay. The group has a debt to suppliers totaling about 22.6 million shekels, a debt to property lessors where Brown operates totaling about 167 million shekels (including future debt), and a debt to employees totaling about 5.5 million shekels.

Photo: Max Kovalovski

Additionally, the group notes a monthly operational loss of about 4 million shekels and a negative cash flow of approximately 5 million shekels. In their 2022 financial reports, the group's companies reported an accumulated deficit of approximately 400 million shekels.

The request claims, among other things, that "following the War of Swords, many hotels were required to host evacuees from across the country. This hosting did not significantly assist Brown since most of its hotels are city boutique hotels primarily intended for vacationing couples, and include small rooms that are not suitable for the evacuees' needs. Although Brown opened its hotels and began hosting evacuees as early as 10.8.23, most preferred the Dead Sea hotels, Eilat, and the major resort hotels which provide family-oriented leisure facilities, dining rooms, pools, halls, etc."