U.S. Court Prohibits Transfers From Papaya Gaming U.S. Bank Accounts; Papaya Owes $730M Judgment To Skillz Platform

The U.S. Bankruptcy Court for the District of Delaware (the "Delaware court") has prohibited transfers from the U.S. bank accounts of Papaya Gaming Ltd., an Israeli company, and its U.S. subsidiary, Papaya Gaming Inc. (together, "Papaya"). Papaya owes a judgment of approximately $730 million to Skillz Platform Inc. ("Skillz"), a wholly owned subsidiary of Firy Inc. (NYSE:FIRY) ("FIRY"). The only exception to the order is for certain categories of scheduled ordinary-course payments, which Papaya must first fund from its accounts outside the United States, so cash in the U.S. accounts grows from operations rather than shrinks.

Judge Mary F. Walrath delivered an oral ruling on Friday, October 23, 2026, following a three-day evidentiary hearing held October 14 through 16, and entered a written order on Tuesday, October 27, 2026. At the hearing, Skillz, Papaya’s largest creditor, challenged Papaya’s petition to have its insolvency proceeding in Israel (the "Israeli proceeding") recognized in the United States under Chapter 15 of the U.S. Bankruptcy Code.

Over the twelve months before the order, an average of roughly $30 million a month left Papaya’s U.S. accounts, according to the order’s payment schedule. Every ordinary-course payment must now be pre-funded from Papaya’s accounts outside the United States at 115% of the amount paid, no transfer may be made to insiders or affiliates, and Papaya must report each payment to Skillz’s counsel and the U.S. Trustee. The court also voiced concern about Papaya’s CEO, Oriel Bachar, serving as Papaya’s foreign representative.

The Delaware court based its ruling, in part, on determinations that Bachar was not credible in his testimony regarding Papaya’s cash transfers, and that Papaya did not inform the U.S. District Court for the Southern District of New York (the "New York court") of transfers that likely would have changed that court’s decision on restraining Papaya’s U.S. revenue. The Delaware court also cited the New York court’s judgment that "Papaya’s fraudulent conduct was extraordinary."

The court recognized the Israeli proceeding as the main proceeding for Papaya’s Israeli parent. For the U.S. subsidiary, it found that its center of main interests is in the United States and granted only non-main recognition.

The Israeli proceeding continues before the Tel Aviv-Jaffa District Court, where Papaya’s revised repayment proposal awaits a creditor vote, currently scheduled for November 8, 2026. The stay granted by the Israeli court is set to expire on November 25, 2026. The Delaware court’s restrictions remain in place until it rules on any Israeli-approved arrangement or issues a further order.