U.S. Federal Court Orders Papaya to Stop Moving Assets Outside the United States

LAS VEGAS--(BUSINESS WIRE)--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.

What the hearing record established

The hearing record showed that most of Papaya’s revenue comes from the United States: between 85% and 97% of its revenue every month from 2021 through 2026 came from U.S. players. Separately, in a filing made on October 20, 2026 in Israel, a valuation expert retained by Papaya valued Papaya’s equity at approximately $1.29 billion as of August 31, 2026.

The record also showed that Papaya paid its shareholders cash dividends of tens of millions of dollars during the SDNY litigation. The Delaware court found that, in the months before the April trial, Papaya moved more than $70 million from a U.S. bank account to accounts in Israel and did not disclose the transfer to the New York court while that court was considering whether to freeze Papaya’s assets. The Delaware court also found that the transfer prejudiced Skillz and other U.S. creditors.

Background

In April 2026, a unanimous federal jury found Papaya liable for false advertising under the federal Lanham Act and the New York General Business Law and awarded Skillz $420 million, marking the largest false advertising jury verdict in U.S. history. On July 27, 2026, the New York court ordered Papaya to pay Skillz $719 million in disgorgement of Papaya’s unjust profits from false advertising, in lieu of the jury’s award, plus approximately $10 million in attorney’s fees and certain costs, for a total judgment of approximately $730 million. Papaya has filed a notice of appeal of the judgment to the U.S. Court of Appeals for the Second Circuit but has not posted a bond securing the judgment.

On August 2, 2026, Papaya petitioned the Delaware court under Chapter 15 of the U.S. Bankruptcy Code to recognize the Israeli proceeding, and on August 4 that court granted temporary relief pausing certain collection efforts against Papaya’s U.S. assets while it considered the petition. Skillz opposed recognition on numerous grounds, and the court heard evidence and argument over three days in October before issuing its October 23 ruling.

Skillz intends to continue asserting its rights as Papaya’s largest creditor and to pursue collection of the full judgment amount. However, no assurance can be given as to the timing or amount of any ultimate recovery.

For more information: Skillz Platform Inc. v. Papaya Gaming, Ltd., No. 1:24-cv-01646 (DLC) (S.D.N.Y.), opinion and order filed July 27, 2026 (ECF No. 1004); In re Papaya Gaming Ltd., No. 26-11217 (MFW) (Bankr. D. Del.), order entered October 27, 2026 (Docket No. 184) and transcript of ruling of October 23, 2026.

About Firy Inc.

FIRY is a global holding company built to fuel business potential. Through its growing portfolio, including Skillz, RZR and Beamable, FIRY operates at the intersection of content, identity, commerce and performance marketing. By leveraging first-party data, enterprise-scale infrastructure and scalable operating systems, FIRY enables scalable growth while maintaining a disciplined focus on capital efficiency and long-term value creation.

About Skillz (a FIRY company)

Skillz is a leading mobile games platform dedicated to bringing out the best in everyone through competition. The Skillz platform helps developers create multi-million-dollar franchises by enabling social competition in their games. Leveraging its patented technology, Skillz hosts billions of tournaments for millions of mobile players worldwide, with the goal of building the home of competition for all. Skillz has been recognized by Fast Company’s Best Workplaces for Innovators, CNBC’s Disruptor 50, Forbes’ Next Billion-Dollar Startups, Fast Company’s Most Innovative Companies, and the Inc. 5000 list of fastest-growing companies in America. For more information, visit www.skillz.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include all statements other than statements of historical fact, including but not limited to statements regarding the litigation with Papaya Gaming, the judgment entered against Papaya Gaming, any appeal, the related proceedings in the United States and Israel, enforcement and collection efforts, the timing and amount of any recovery, and our strategy. Additional information regarding factors that could materially affect results and the accuracy of the forward-looking statements contained herein may be found in FIRY’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026 and in our subsequent filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. FIRY undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.