Creditors late Tuesday rejected a proposed debt agreement that would have let fallen tycoon Eliezer Fishman repay less than a 10th of some 1.7 billion shekels ($480 million) that he owes them.
- Fishman Deal: Billions Disappear and No One’s Asking Why
- Fallen Israeli Tycoon to Repay Only Fraction of 1.7 Billion Shekels He Owes Creditors
- Embattled Israeli Tycoon's Top Creditors Oppose Debt Plan
The accord's fate was effectively sealed when two of the biggest creditors — Bank Hapoalim and Bank Leumi — said they opposed the terms. On Tuesday before creditors met to hear the plan in detail and ask questions, Mizrahi-Tefahot Bank and Israel Discount Bank also said they rejected the plan.
“The bank had no advance knowledge of the proposal and the main terms included in it, and hadn’t been consulted, so the bank never gave its approval,” Mizrahi said. “An initial examination of the proposal shows that it is inappropriate and the bank opposes it.”
Still, Joseph Benkel, the court-appointed administrator who had negotiated the terms with Fishman’s attorneys, defended the agreement at the meeting.
“We aren’t pretending that what we did is perfect, but that’s life. You, the creditors, are the masters of the process and you will decide,” Benkel told a meeting attended by financial institutions and the Israel Tax Authority, which is also a Fishman creditor. Outside dozens of protesters shouted slogans against the agreement.
“The negotiations weren’t easy but these are the terms reached,” Benkel said. His presentation was open to the media but the second half of the meeting, where creditors could question Benkel, took place behind closed doors, so there was little information about their reaction.
Under the terms of the agreement, which Benkel stressed was only an agreement in principle, Fishman could end up paying as little as 140 million shekels of the debt now under consideration, meaning creditors would be taking a haircut of 92%. Some 107 million of that would go to the tax authority.
Once one of Israel’s most powerful tycoons, Fishman stopped repaying his debt years ago but was only forced into bailout talks after the tax authority sought to have him declared insolvent last year. All told, Fishman companies owe some 4.5 billion shekels, but only 1.7 billion of it — the part he personally guaranteed but has no collateral to cover — is covered in the agreement.
Benkel had clashed with Fishman, his family and their attorneys over the months they negotiated the accord, but Benkel was forced to compromise by Tel Aviv District Court Judge Eitan Orenstein, who is overseeing the case. Benkel had accused the family of stonewalling in his search to uncover the extent of Fishman’s assets and accused the family of gifting assets to the tycoon’s adult children over the years to prevent them from being used to settle debts in case of bankruptcy.
Now that the creditors have rejected the accord, Benkel will begin 30 days of negotiations with Bank Hapoalim, the biggest creditor, over the details of the agreement