Fishman's creditors agree on bankruptcy proceedings

Eliezer Fishman

Fishman: The banks rejected the debt arrangement because of public pressure, not on its merits.

Advocate Joseph Benkel, the special manager for businessman Eliezer Fishman's assets, today informed Tel Aviv District Court president Eitan Orenstein that Fishman's creditors - Bank Hapoalim (TASE: POLI), Bank Leumi (TASE: LUMI), Israel Discount Bank (TASE: DSCT), Mercantile Discount Bank, Mizrahi Tefahot Bank (TASE:MZTF), Union Bank of Israel (TASE: UNON), and the Israel Tax Authority - were unanimously in favor of declaring Fishman bankrupt and appointing Benkel as trustee for the proceeding. Excellence Investments Ltd. (TASE: EXCE) was also not opposed to the measure. Benkel said that Fishman himself did not oppose his being declared bankrupt.

"For the sake of giving the complete picture, it should be known that the debtor believes that the creditors rejected the principles for the creditors' arrangement for non-business reasons, and that he is petitioning the honorable court to order a hearing on the merits of the case," Benkel stated.

The official receiver's views are identical to those of the creditors. Benkel said, "The official receiver is repeating his previously stated stance that a bankruptcy declaration order should be issued in the debtor's affairs, and that Benkel should be appointed as trustee for the debtor's assets in the bankruptcy proceeding."

Fishman notified the court yesterday that he did not oppose his being declared bankrupt, but at the same time, he wrote that it was not proper to allow his creditors, headed by the banks, to rule out the debt arrangement format on which he had agreed with Benkel.

Fishman said, "The creditors did not examine the arrangement concerning its approval, and did not analyze its chances and the risks in the portfolio and the alternative."

Fishman asserted that all that the banks wanted was "to remove the public pressure against them, while needlessly sending the special manager and Fishman to court for years of disputes. It is clear to everyone that the result of such proceedings will be inferior to the proposed compromise, while having a negative impact on the activity of the companies and causing irreparable damage."

Fishman attacked his creditors and Benkel, and asked the court to order the special manager and his creditors to treat the debt arrangement he had proposed "in a business-like manner befitting the substance of the bankruptcy proceeding… whether before the declaration of bankruptcy or after it."

Under the rejected debt arrangement format, it was agreed that out of NIS 1.8 billion in debt, Fishman and his family would pay NIS 400 million in to the creditors' fund in two stages. According to the proposal, which is no longer valid, the Fishman family would put NIS 140 million into the fund in the first stage, in addition to paying NIS 15 million to the Israel Tax Authority for payment of the Fishman Networks company's debts and to enable the company to continue its operations.

In the second stage, which would have taken effect five years later, the Fishman family would have paid an additional NIS 260 million, following the sale of the Fishman family's holdings in Fishman Networks and AT Refrigeration Holdings.

Publication of the Fishman debt arrangement aroused a storm among the public and in the media, following which the banks rescinded their plan to support the arrangement, and the Fishman case moved towards a bankruptcy proceeding.

Published by Globes [online], Israel Business News - www.globes-online.com - on June 20, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Eliezer Fishman
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