Owner of Israeli Umbilical Cord Blood Bank Threatens to Cut Off Nitrogen Supply

Miki Shacham, owner of Biocord, is demanding more money from parents to relocate cord blood; Ministry of Health calls for him to be held in contempt of court.

The CEO and owner of the Israeli umbilical cord blood bank Biocord, also known as LifeBank, told thousands of customers last Thursday evening that beginning on Sunday, no more liquid nitrogen would be pumped to the freezers storing the umbilical blood from their children. He also announced that he would not be in further contact with customers. 

“I will no longer be available to respond to specific customer requests of any kind, for any reason, that have to do with Biocord, and thus I bid all of you farewell,” Miki Shacham wrote.

However, Shacham is willing to receive, “by all means,” customers who wish to join – for NIS 1,000 – the cooperative organization he established to save their umbilical cord blood and store it in a new freezer he supposedly bought. “But not after Sunday, when the supply of nitrogen in Biocord’s freezers will not be replenished,” he wrote.

Shacham made his announcement in complete violation of orders from the Health Ministry and the court, having already violated a court order by transferring some of the umbilical blood, which contains important stem cells that can be used to treat future diseases, to the new refrigeration unit for those who paid. 

He said his move received official approval from the Tel Aviv District Court after a hearing that took place several hours before he wrote the letter. During that hearing, Shacham asked that it be noted that he had no more financial resources to fund the preservation of the umbilical blood. The judge extended the injunction against Biocord and Shacham, forbidding him to do anything that might damage the umbilical blood samples.

In response to the letter Shacham wrote to customers, Talia Agmon of the Health Ministry’s legal department issued a strongly-worded letter demanding that he retract, by 9 A.M. Sunday morning, his threat to stop supplying nitrogen to the freezer units. “If not,” Agmon’s letter stated, “we will be compelled to take binding measures, including going to court.”

Agmon told Shacham that he was personally responsible for the umbilical blood samples. 

“The court order obligates you personally, and Biocord, of which you are the controlling owner in every sense, to continue taking every action required to preserve the samples in the bank until the court should decide otherwise,” she wrote. “This includes ordering nitrogen to fill the units where the samples are stored and making sure that the freezer units are supplied with the nitrogen.... The court has not exempted you in any way from doing so, and the injunction is unequivocal on this matter, even if your statement regarding the lack of funding sources was noted in the protocol.” 

The letter also stated that Shacham had no excuse for not supplying the nitrogen to the freezer units since the supplier, Oxygen and Argon Works, agreed to provide it regardless of payment.

“If Shacham doesn’t retract his statement on Sunday morning, we’ll go to court to compel him to obey the court order that he received himself – to fill the units with nitrogen," said Professor Ronni Gamzu, director-general of the Health Ministry, in an interview with TheMarker. "We will demand that he obey the order, and if he does not, we will define that as contempt of court.”

When asked why the ministry didn't request that Shacham be held in contempt of court until now, Gamzu said, “Miki Shacham was in contempt of court and the judge knows that. 

"In light of his bad behavior, it is even likely that he might prefer to go to jail for contempt of court to avoid taking responsibility. The court may have realized that, too.”

Gamzu believes that Biocord’s customers should petition for a liquidation order against Shacham to move the process along. 

“We know that Shacham has money hidden somewhere," he said. "The fact that Biocord has no money in its account doesn’t mean that there’s no money in Shacham’s other accounts. In our opinion, that’s the reason Shacham hasn’t declared bankruptcy, but is ‘resigning’ instead. The only way to find out where the money is hidden is for the customers to petition for a liquidation order. Then the case will go to the appropriate court, which will begin the process and search for assets.”

Starting Sunday morning, parents intend to hold protest vigils in front of the offices of the Health Ministry and Biocord, and in front of the place where the umbilical cord samples are kept. According to Sharon Galili, the head of the parents’ group, since the latest letter was issued last Thursday, many parents “are terrified that the samples could be destroyed tomorrow.” But other parents believe that “it’s a threat like any other of Shacham’s threats and that no credibility should be given to his attempts at extortion.”

Gil Cohen Magen