The receivers of Better Place submitted to the Supreme Court on Friday a confidential report that raises grave doubts about the ability of potential buyer Success Assets to meet its obligations for purchasing the bankrupt electric-car infrastructure company. The principal owner of Success Assets, Tzachi Merkur is appealing a district court ruling from October 3 voiding the sale.
- Better Place Sale Fizzles as Latest Buyer Misses Deadline
- Better Place’s New Owner Looks to Sell Remaining Fleet of Electric Cars
- Better Place Sale Proceeds With NIS 2 Million Down Payment
- Better Place Back on the Block After Supreme Court Rejects Buyer's Plea
According to the receivers, attorneys Shaul Kotler and Sigal Rozen-Rechav, their report sends up major red flags about Success Assets’ ability to meet its commitments concerning its purchase of Better Place, including Merkur’s ability to provide adequate personal guarantees.
Kotler and Rozen-Rechav say they have received numerous emails claiming that Merkur and companies under his control, including Success Charging, a battery-charging operation in the United States, have significant outstanding debt to employees and suppliers.
Judge Ilan Shiloh of the Central District Court in Lod had voided the sale after the receivers submitted an urgent request in which they claimed the buyer had carried out a material breach of the purchase agreement by missing the first payment deadline. Merkur appealed the ruling in the Supreme Court. The receivers are asking the Supreme Court to uphold the original ruling. Failing that, they want the court to require Merkur to post a sum considerably in excess of the original NIS 1.8 million initial payment that was missed.
A stay of execution from the Supreme Court would prevent the sale of Better Place assets and result in their value to potential buyers decreasing with each passing day, the receivers argue. "It is clear the proceeds from selling the assets won't cover the bankrupt company's debts to its creditors and that Merkur, who signed an agreement to buy the assets, grossly breached it while admitting explicitly and by his behavior that he hasn’t the ability to pay the amount to which he committed himself," they said.
A number of Better Place clients claim there has been a considerable drop in the capacity of the charging posts installed at their homes in recent days. "When such an abnormal change occurs for many customers at the same time, it must result from intervention in the posts' settings," said Efi Shahak, chairman of the Association for the Advancement of Electric Transportation in Israel. He said Success Assets told him customers need to pay in order to settle the matter.
"Success Assets acted brutally towards clients in recent days by sending out draconian contracts and threatening messages about stopping service to anyone who doesn’t pay, including impairment of the charging posts," said Shahak.
Success Assets responded: "Since purchasing the operations, the company makes sure it provides the full service package … Maintenance involves millions of shekels in monthly costs … There are customers who still haven't settled their arrangements with the company, haven't sent in payment, and haven’t settled their debts. Nonetheless, no complete shutdown of services has been performed."