Most of Emblaze's board members are resigning as the company heads toward a buyout that would entangle it in Nochi Dankner's debt-laden IDB group.
The affair involves plans by Jewish-Ukranian businessman Alexander Granovsky to seize control of a portion of Dankner's stake in the company.
Granovsky intends to buy a significant portion of Emblaze shares via an Israeli company, BGI, in order to get at the more than $145 million Emblaze has in its kitty. Granovsky maintains indirect control of BGI through the charity fund Chabad 770.
Granovsky met with Dankner over the weekend in Sardinia, Italy in order to hash out a plan whereby BGI would invest in IDB in exchange for some part of Dankner's stake in the company.
IDB group companies IDB Holding Corp. and IDB Development Corp. are embroiled in debt settlement talks with creditors to whom they owe a total of NIS 8 million.
IDB bondholders are haring to seize control from Dankner, while Dankner is scrambling to find an investor to prove to the court that his companies can meet their obligations. A final hearing is due to be held on the matter later this month.
BGI had NIS 220 million in cash as of March. On Tuesday, its board approved a plan to buy a significant portion of Emblaze from shareholders Naftali Shani and Donald Strum, and potentially also the shares held by the Fortissimo fund at a later date.
In response, IDB bondholders sent a letter to Emblaze's board members warning them they could face a lawsuit and asking them to explain how they would ensure bondholders would receive the NIS 100 million they are due within the next two years.
Resigning board members include Ilan Flato, chairman of the Israeli Association of Publicly Traded Companies.