Court appoints administrator for Papaya Gaming, demands stronger debt plan
With only $151 million in cash to cover $754 million in liabilities, the gaming company has 45 days to draft a realistic settlement after a judge found its current seven-year repayment strategy inadequate.
The Tel Aviv District Court has approved a 45-day temporary stay of proceedings for Papaya Gaming Ltd. and Papaya Gaming Inc., allowing the companies to formulate a debt settlement with their creditors. Attorney Gil Oren of Yigal Arnon & Co. was appointed as the arrangement administrator, tasked with working to improve the proposed arrangement in coordination with the creditors and the insolvency commissioner.
The companies, which develop and market skill-based mobile games, have become cash-flow insolvent. According to data presented to the court, their total liabilities amount to approximately $754 million, compared with only about $151 million in cash. Approximately $719 million of the debt stems from a judgment issued on July 27, 2026, by the U.S. District Court in New York in favor of competitor Skillz Platform Inc.
The dispute between the companies has been ongoing for years, and the New York judgment imposed the aforementioned debt of hundreds of millions of dollars in favor of Skillz. Skillz also opposed the arrangement proposed by Papaya, calling instead for the companies to be placed in full liquidation proceedings and for a trustee to be appointed to investigate their management in light of the findings established in the U.S. proceedings.
Papaya proposed restructuring the debt and transferring future profits from its continued operations into a dedicated fund for seven years, with the aim of repaying the debt in full. The judge rejected, at this stage, Skillz's demand for liquidation, ruling that such a move could result in a significant loss of value. However, she determined that the proposed arrangement in its current form was inadequate, partly because it relies on future revenues without guarantees or an owners' contribution.
The stay of proceedings will remain in effect for 45 days from the removal of the publication ban, on August 3, 2026. Because a significant portion of the creditors and users are located overseas, the judge ordered that notice of the proceedings be sent by email in English to relevant customers and users in the United States, and extended the deadline for filing claims to 14 days from the date of publication.
