Key IDB group officials have tendered their resignations as controlling shareholder Nochi Dankner struggles to retain some measure of control over the conglomerate. Deputy CEO and chief financial officer Eyal Solganik and IDB Development CEO Shoni Albeck have informed Dankner of their intentions to resign. They will make their final decisions known by Saturday night, once legal issues concerning their directors' insurance are cleared up.
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Solganik and Albeck have stood at the forefront of Dankner's battle with bondholders and bank creditors over control of IDB while Dankner himself fought off creditors owed NIS 1 billion by his privately held companies, Tomahawk Investments and Ganden Holdings.
Sogalnik joined IDB in 2006 after previously serving as head of the Israel Security Authority's corporate department. Enjoying compensation worth NIS 15 million, during IDB's heyday he played a key role conjuring up impressive paper profits.
Albeck, a former legal counsel at the ISA, only joined IDB in the latter half of 2011, just about the time that cracks began emerging in the group's finances. He has been a leading figure in talks over a debt restructuring.
An IDB spokesman responded: "Unfortunately, due to the complex legal situation, a particular problem has arisen with respect to the policy covering directors' insurance and officers at IDB Holdings and IDB Development. We are trying to find a quick and effective solution to the problem with the help of lawyers and insurance consultants. No other manager or senior officer in the group has asked to leave due to the financial or business situation, and certainly none due to any issue connected with controlling shareholders."
Meanwhile, it appears that Alexander Granovsky, the ultra-Orthodox investor from the Ukraine who recently teamed up with Dankner to keep IDB bondholders from wresting control over the conglomerate, will ante up the NIS 70 million nonrecoverable down payment toward a debt settlement with bondholders as required by Tel Aviv Judge Eitan Orenstein.
Granovsky hopes to come up with the remainder of the NIS 500 million needed for settling with bondholders from the deep coffers of Emblaze, a subsidiary of BGI Investments which he controls, but the move remains subject to approval by other Emblaze shareholders.
At the same time, IDB Holdings bond trustees have recommended to the court that attorney Hagai Olman, the court-appointed outside observer for IDB, be appointed special manager of IDB Holdings if and when creditors assume control of the company. But according to sources close to bondholder representatives, they oppose his assuming such a position.
Until recently Olman maintained a conciliatory approach toward IDB, but in recent weeks has indicated to the court that he wouldn't object to, and might even support, the transfer of control to creditors. As it now turns out, he might be put in the position of dealing with the splitting up of cash remaining in the company's coffers, finding an investor for subsidiary IDB Development, and dealing with potential future claims against company directors and officers.
A meeting of IDB Holdings bondholders earlier yesterday voted 85% in favor of a sale of 51% of the company's stock to Argentine investor Eduardo Elsztain for NIS 770 million.
On Sunday the court will discuss whether to approve a settlement whereby bondholders receive IDB Development shares and split the cash among themselves. If this arrangement is approved by the court, it will mean the end of Dankner's control over the company.