In the case of financially troubled business tycoon Eliezer Fishman, Tel Aviv District Court Judge Eitan Orenstein ruled Tuesday that no temporary receiver will be appointed prior to the slated September 29 hearing. Although the case now also involves Fishman’s creditors, it was precipitated by the filing of a request by the Israel Tax Authority to have him declared bankrupt.
At the center of the authority’s request is a 196-million-shekel ($52 million) tax bill from 2006 that was not paid by Fishman. He had unsuccessfully appealed, claiming that he should be able to use capital losses to offset the capital gains he had after selling shares to cover other debt.
The Supreme Court rejected Fishman’s appeal last month, however, which prompted the Tax Authority’s move.
On Sunday, Bank Hapoalim, Fishman’s largest creditor, asked the court to allow it to take the collateral Fishman had pledged against 1.8 billion ($480 million) in debt. The bank noted that the collateral included a wide range of assets, including his 34% share in the Yedioth Ahronoth publishing group as well as real estate and shares. Bank Leumi, which is owned some 1.7 billion shekels, assumed his 44% stake in the Jerusalem Economic Corporation real estate firm last March.
There is no disputing the fact, Judge Orenstein said, that Fishman is insolvent, especially after the businessman himself has acknowledged that he has debts of about 3.4 billion to 3.9 billion shekels, and assets worth 50 million to 70 million shekels.
In his ruling Tuesday, Orenstein said there is no basis for appointing a temporary receiver absent proof that there is substantial concern that the debtor’s assets will lose value without the appointment of a receiver, although the judge did bar the sale of any of Fishman’s assets without court approval. The judge suggested that the efforts of Fishman’s creditors would be better served by attempting to reach a settlement.
Orenstein also turned down Fishman’s request that retired District Court Judge Varda Alshech mediate the case, due to the opposition of the Tax Authority, although the banks were willing to agree to mediation. Such a process, the judge noted, requires the consent of the parties involved.
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