IBM Denying Services to Clients of Better Place Post-bankruptcy, Israeli Court Told

For its part, the U.S. technology giant says it hasn't suspended any services and simply wants the bankrupt company to pay it in advance.

Most Better Place suppliers have been cooperating to keep the bankrupt company's operations running, but IBM is not among them, the receivers for the electric-vehicle refueling firm told the Lod District Court on Thursday.

"IBM hasn't been cooperating therefore we are seeking a specific order requiring IBM to continue supplying services," said attorney Shaul Kotler, one of Better Place's two court-appointed receivers. He called IBM "the only supplier today that is putting the sale of the company in jeopardy."

Kotler said that while the two sides had been negotiating over reducing the services IBM provides Better Place, the U.S. information services giant had begun what he called an "Italian strike" – passively cutting off services – by blocking passwords and permissions.

Kotler estimated that IBM provided about NIS 1.5 million in services to Better Place, not counting value added tax, out of total monthly operating costs of NIS 7 million. "We were quite surprised at the cost of IBM services," he added.

Kotler said that in recent days IBM had raised a claim for some $40 million in debts owed by Better Place, which filed for bankruptcy last month.

In response, Eran Gafni, an attorney for IBM, said no services had been suspended but that the company had blocked access to Better Place staff who tried to perform operations outside the contract between the two companies. "The receivers want to transfer data and other things that would harm us," Gafni said.

IBM, he asserted, is the only Better Place supplier running up costs of NIS 50,000 a day without any certainty that it will get paid. He said the company wanted to be paid in advance.

Kotler, meanwhile, said better Place employees had received their May salaries, but the situation is still unclear for clients who prepaid for services for their specially designed electric cars.

Better Place's receivers said they had received 25 offers to buy various parts of the company. Since the offers were not overlapping, the receivers said they preferred to sell the company's assets – like its battery-changing stations, recharging terminals and electric cars in inventory – individually.

Judge Ilan Shiloh authorized the receivers to continue Better Place operations until July 10 as they continue their efforts to sell the business.

Reuters