At 10 a.m. yesterday a number of executives from IDB Holding Corporation, the company at the top of Nochi Dankner's business pyramid, showed up to speak to the firm's bondholders. The bondholders are owed a total of NIS 1.7 billion, and the banks are owed NIS 300 million more.

Yesterday's meeting was called by the trustees of the five series of IDB Holding bonds after the company's auditors attached a "going concern" warning to the firm's second quarter financial reports, which were released last Friday.

IDB was represented by CEO Haim Gavrieli, CFO Eyal Solganik and Sam (Shoni) Albeck, another senior executive. Both Solganik and Albeck were previously senior officials in the Israel Securities Authority. Dankner was not present.

"You announced a 15% cut in wages. That isn't enough," one bondholder told the executives. "Executive salaries in at companies in such situations can't be higher than NIS 50,000 a month. That could save millions. Do you intend to cut salaries even more?" the bondholder asked.

Solganik said: "That is an interesting proposal. The message is understood, and we will pass it on."

Despite the media fanfare surrounding the deteriorating financial state of the IDB group, the bondholders meeting went relatively peacefully, with some 150 people present.

The major obstacle for IDB are the private bondholders of its Series B bonds, who are scheduled to receive a NIS 35 million repayment on Thursday. The next big payment, NIS 60 million, is scheduled for Series D on December 20.

IDB Holding made a new offer to Series B bondholders yesterday: Instead of a cash payment, IDB will deposit the amount in a trustee account to be paid to bondholders on December 14, as long as the bondholders of the other series do not view the payment as preferential treatment of Series B bondholders, and act to prevent the payment.

But yesterday it turned out that Series B bondholders also object to the proposal and are demanding the full payment - and on time. A final decision on the matter will be made today. There are also large institutional investors who also hold Series B bonds, including the Amitim pension funds and Harel.

Executives at Harel said on Sunday they expected Dankner and his partners to provide funds for IDB to pay off its debts. The case of Amitim is even more ironic, as that fund was the one that provided Dankner with a large part of the crucial missing funds he needed in 2003 to take control of IDB. Now Amitim, the nationalized confederation of the veteran pension funds, may be the one to force the decision to take IDB away from Dankner. If Amitim does not change its demand for an on-time payment, then the bondholders of the other series will most likely turn to the courts and ask for an injunction against the payment on Thursday.

"We hope the bondholders will continue to believe in the company. We have reached the present situation because of the 'going concern' warning attached to the recent [financial] reports for the second quarter of 2012, but IDB has the ability to meet its commitments," said Gavrieli. "IDB is a company with a moral compass," he added.

"We are making all [possible] efforts, but we cannot commit to there being no debt arrangement," said Albeck. "All the talk of a [debt] arrangement brings it closer. We are not there yet. Stopping payment on the bonds might start a wheel moving that has no brakes," he added.

"What was the logic of buying the Maariv newspaper?" asked one bondholder.

Solganik replied: "When Discount Investment bought Maariv, it was a strong company, and the purchase was considered not to be significant. As of today, Discount Investment is weaker, and the purchase is a burden," he said.

As to the possibility that the owners would put up their own money, Solganik said: "The owners are making great efforts to find an investor. Naturally, they will have to have [their holdings] diluted, and that is the equivalent of providing funds," he said.

In addition to DB Holding, other members of the IDB group also owe huge sumes to the public. IDB Development, a fully-owned subsidiary of IDB Holding, owes bondholders NIS 3.4 billion and Discount Investment, another group company, owes NIS 4.2 billion.