Israeli Tycoon Eliezer Fishman Opposes Receiver for Jerusalem Economy Corporation Stake

Ahead of court battle, the heavily indebted Fishman asserts Leumi's petition will detract from value of firm's shares.

Eliezer Fishman
Ofer Vaknin

Heavily indebted tycoon Eliezer Fishman said Monday he would fight Bank Leumi’s plan to appoint a receiver for his shares in property developer Jerusalem Economy Corporation, as the bank seeks to recover hundreds of millions of shekels in unpaid debt.

Speaking through attorneys Shalom Goldblatt and Ehud Gindes, Fishman said, “There’s no reason to panic and ask to appoint a temporary receiver for the Fishman shares in Jerusalem Economy. A receiver isn’t helpful, just the opposite. Appointing a receiver tells the market it’s worthwhile waiting, because in the future there will a chance to buy the collateralized shares in a forced sale.”

Fishman blamed Leumi’s decision to petition Tel Aviv District Court last Thursday to appoint a receiver for Fishman’s 40% stake in JEC as being responsible for the sharp drop in the property developer’s share price. On Monday, JEC shares shed another 8.7% to close at 6.12 shekels ($1.58), leaving it with a market capitalization of just 496.6 million shekels.

“The bank’s petition is hurting the company and value of the collateralized shares. The decline of the stock last week reflects that fact,” the Fishman statement said. Judge Eitan Orenstein is scheduled to hold a hearing on the Leumi petition Tuesday at 9 A.M.

Leumi acted after the sale of JEC it had engineered to the Israeli-American Nakash family fell through last week, depriving the bank of some 370 million shekels it hoped to retrieve from the sale.

On Sunday, the Nakash brothers’ newly appointed attorney, Giora Erdinast, told Leumi that his clients were still interested in buying the JEC shares, but only if the issue it cited over rights to a venture asset controlled jointly by JEC and a third party is resolved. Leumi is threatening to impose a 35-million-shekel penalty on the brothers for backing out of the sale.

Goldblatt and Gindes asserted that Fishman had cooperated with the bank in trying to sell the JEC stake – first to billionaire Beny Steinmetz and later to the Nakash brothers.

“What is the point in appointing a temporary receiver under these circumstances, when the shares have already been pledged and are held by the bank, and the bank has sought to sell them, without any intervention [by Fishman], as it has seen fit?” the attorneys asked.

Fishman noted his four decades of business with the bank, to whom he said he has billions of shekels in outstanding debt, making him one of the bank’s biggest borrowers.

His attorneys expressed surprise that Leumi claimed in its court filing last week not to know the extent of Fishman’s debts, which are estimated to be about 4.5 billion shekels – more than twice the estimated value of all his assets, which include JEC, retail chains like Home Center, media and real estate holdings.

“The claims in the bank’s petition that the bank ‘read and learned in the newspapers’ about Fishman’s activities and his debt is ridiculous. Relations between Leumi and Fishman were based on complete transparency and cooperation. The bank received all the information it requested on a regular basis,” they said.