Alrov (Israel) Ltd. (TASE: ALRO), controlled by chairman Alfred Akirov, today asked the Tel Aviv District Court to annul the temporary lien on assets of subsidiary Alrov Properties and Lodgings Ltd. (TASE: ALRPR) in favor of Hilton Hotels granted by the court last week in an ex parte judgment. Hilton Hotels obtained a lien for up to NIS 97 million in Alrov Properties' assets in order to ensure that the company will pay the $20 million arbitration award to Hilton Hotels ordered by arbitrator Adv. Dr. Israel Leshem.
Alrov claims that the real reason for the temporary lien in favor of Hilton Hotels last week was to "embarrass Akirov, damage his reputation, the budget and cash flow of the company, threaten it, create bad press, and harm it."
Alrov went on to claim that this was because it dared to insist on its rights to seek the annulment of the arbitrator's ruling against the company, which was illegal because Leshem had a conflict of interests that he did not disclose.
In the request for the lien, Hilton Hotels claimed, on the basis of an expert opinion, that Alrov Properties was close to insolvency, raising concern about payment of the arbitration award.
In its statement of defense today, Alrov claims that the calculations by Hilton Hotel's expert are nonsense. It said the request for the lien was irresponsible because Alrov Properties owned income-producing assets throughout the world worth more than NIS 3.5 billion and the company's shareholders' equity was NIS 905 million. It added that Midroog Ltd. gives the company's bonds an A3 rating, and that Bank Hapoalim (TASE: POLI; LSE:80OA) declared, at Alrov's request, that "the company has the wherewithal to pay the arbitration award of NIS 84 million from its sources."
Published by Globes [online], Israel business news - www.globes-online.com - on February 25, 2009
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