Tel Aviv District Court Judge Eitan Orenstein said that he had approved the sale of Eliezer Fishman's shares in Monitin, the controlling shareholder in "Globes," not the sale of the newspaper itself. Orenstein made his comments at the beginning of last Thursday's hearing in which receivers Advocates Eyal Rosovsky and Ronen Matry's petitioned to sell the newspaper to David Davidovich. Orenstein said he lacked the power to approve the sale.
Orenstein blasted the receivers and said, "a newspaper is not a plot of land in Ra'anana, there are employees, journalists and they must be involved."
At the end of the hearing, Orenstein ruled that the receivers and the Bar-On family would enter mediation to reach an agreed format for selling the newspaper, while taking into account the future of the newspapers' workers. He appointed Judge (ret.) Hila Gerstel as mediator, and asked her to make a decision within three weeks. If no agreement is reached, Orenstein will rule on the petition, and hinted he will probably not approve it, due to lack of authority.
At the beginning of the hearing, Matry said that the petition was for the receivers to be instructed on how to vote on the sale at the shareholders' meeting. Orenstein answered, "This is inconsistent with the announcement you published about the sale of "Globes." I did not authorize you to do this. I saw the announcement and I was very surprised. I was glad of one thing: that my name did not appear as the judge who approved the sale, but the judge's name should appear. Where did you get this authority? You released a statement and published a sale contract."
Orenstein added that the receivers do not have to ask him for such instructions; it was a matter of their authority, and that if there was a dispute between them and the Bar-On family, which owned a third of the shares in Monitin, it should be heard in the authorized court, not the bankruptcy court. "You appointed a board of directors in Monitin to act at your discretion. I don't have to give them support. What is this - a court pre-ruling, so that you won't be sued later?", he said.
"This petition is very questionable"
Orenstein repeatedly interrupted Matry, saying that he did not accept Matry's explanations. "Good heavens, who authorized you? How did you offer this to the public?" Matry said that the sale of the shares was upsetting the newspaper, and the purpose was to reduce the damage that the process was causing. Orenstein answered that the receivers should have asked him for appropriate instructions.
"You're offering the public something that isn't yours. Who are you? This petition is very questionable. I must say that I wonder about you two. I read this six times; I thought I didn't understand," Orenstein said in his rebuke of Matry and Rosovsky. Rosovsky argued that they had taken the place of the shareholders, and had brought bids to the company's management, since the buyers had preferred to acquire the assets ("Globes" and its printing house), not the Monitin shares. According to Rosovsky, since the company board of directors had not made a decision, the receivers were petitioning for the convening of a shareholders' meeting and for instructions from Orenstein.
"You're petitioning after the fact," Orenstein responded, He said that did not have to say that the receivers had authority to vote as they saw fit at the general meeting of shareholders in Monitin. On the clause in the instructions to the bidders, according to which the sale was subject to his approval, Orenstein said, "This is misleading the bidders." Rosovsky argued that the announced had been written under the assumption that the bids were for Monitin shares, not just for "Globes."
Orenstein answered, "You acted first, and now you're petitioning for approval of what you did. It's shady dealing to do the whole thing when you are aware of disputes with the Bar-On family, and then to come to me. You bypassed the board of directors." Rosovsky answered that the receivers had not bypassed the board; they had acted in cooperation with the company. Orenstein continued, "Did you ask Monitin to sell "Globes" and the printing house?" Instead of answering, Rosovsky repeated his argument that they had not expected the board to omit discussing the sale of the newspaper.
A fire sale on a short timetable
Orenstein asked Adv. Boaz Edelstein, the legal representative of the Bar-On family, whether his clients would now agree to the sale in order to avoid a legal dispute with the receivers. Edelstein answered that the receivers had intended to sell the newspaper from the very start, even though the Bar-On family had informed them that there were not authorized to do so. He argued that the board of directors had not discussed the matter, and that the receivers had demanded that the decision be taken at the general shareholders' meeting, in which they had a two thirds majority.
Orenstein said that the receivers had not managed to obtain bids for Fishman's shares, and that selling "Globes" might therefore be in order. Edelstein answered that the sale was under pressure on a short timetable, and it was possible that Davidovich's bid (NIS 47.5 million) was not the best bid that could have been obtained. "We are not categorically opposed to a sale. We want a discussion held about whether to sell now, and if so, how. The way things were done, we can't live with this," he commented.
"You have a partner," Orenstein told Matry. "You should go to him and say, 'We want to sell. Let's sit together, do it together with the journalists and the workers, because it's a going concern'." Matry said, "They are saying that they have a right to refuse." Orenstein responded, "Then you need to discuss that with them." Matry continued, "They said that we had an agenda to shut down the newspaper for a year, and then sell it, and we saw that there were potential conflicts of interest here."
According to Matry, the board of directors had conducted 10 long and tumultuous discussions, in which it had become clear that there was an adversary situation of two thirds against one third. He expressed concern that renewing the sale process would cause the bidders to shy away from the sale. "The right way is through dialogue; otherwise, everyone will be hurt," Orenstein said. He called on Rosovsky, Matry, and Edelstein to approach the bench, and talked with them out of the hearing of those present in an attempt to reach agreement. The hearing ended with Orenstein appointing Gerstel as mediator for the purpose of reaching an agreed format within 21 days for selling the newspaper.
Published by Globes [online], Israel Business News - www.globes-online.com - on January 15, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017