Better Place’s Patents Held Overseas, Liquidator Says

Turns out that the electric car venture's assets are held in Switzerland.

Some of Better Places’ key assets − the patents it owns for its sophisticated electric-vehicle refueling system − are mostly controlled by a Swiss-based affiliate that is for now out of reach of liquidators, Sigal Rozen-Rechav, one of two attorneys appointed by a court to oversee the bankrupt company’s affairs, told the Knesset Thursday.

She told the Knesset Economic Affairs Committee that getting ahold of the patents is the most important problem she is facing. Liquidators plan to file a petition to dissolve the Swiss firm, noting that all 14 of the Better Place group of companies worldwide were administered as a single business entity, she said.
Shai Agassi, who founded Better Place but was ousted last year as the company failed to realize its ambitious plans, established 10 affiliated companies outside of Israel, including a parent firm based in the United States.

They are not subject to the liquidation proceedings here. Meanwhile, Rozen-Rechav expressed doubt that the liquidators could continue operating Better Place with such a small base of customers driving its specially designed electric-powered cars.

Before the company filed a motion to be wound up on Sunday, it had sold a mere 900 vehicles in Israel and another 400 in Denmark, its second market. Of those 900, Rozen-Rechav revealed about 200 of them are Better Place employees, many of whom have been laid off in the past several days.

“As a first step, we have analyzed what is necessary with respect to the size of the company to enable us to provide [customer support] services for the next week or two,” Rozen-Rechav said. “We need to adjust the size of the company to the [services] that have to be provided.”

As some 209 Better Place staff received their dismissal notices Thursday, Ofer Roen, an attorney representing them, expressed hope that Idan Ofer, the company’s chairman and controlling shareholder of The Israel Corporation, its parent, company, would come through with help.

“The employees believe that Idan Ofer will know how to find a way for employees to receive all that is due them as soon as possible and ensure that employees laid off from the company end their work in a respectful and fair manner,” Ronen said.

The concept behind Better Place was to retail electric-powered cars and then provide a network of battery charging stations for drivers to recharge the batteries or swap them for fresh ones.

But with no prospects for selling more cars, Rozen-Rechav said it does not appear financially feasible to operate the company based only on a revenue stream from recharging.

Another problem Better Place’s customers face is that the cars were sold without batteries, which are owned by Better Place and have liens on them held by Renault.

“We have met with Renault,” she said, “and there is goodwill on their part to work for the good of the customer.” But customers cannot return their cars to the company and receive compensation, she said. “Unfortunately, the customers are creditors like any creditor, and we can’t give them a preference.”
Further complicating the problems for Better Place customers is that the company’s battery-swapping model in unique. Other electric cars have their own built-in power supply. In order to enable drivers to be able to continue using their cars “maybe a permanent battery has to be considered,” suggested Rozen-Rechav.

Better Place’s shareholders, which include The Israel Corporation, have declined to inject any more cash into the ailing enterprise, and the firm has no further line of credit with the banks, she noted. “When [the money] runs out,” she said, “the operations will cease.” If the government would step in and help, the prospect may exist of attracting a new investor to take over Better Place, she said.

Tomer Appelbaum