The Supreme Court today ruled that Emblaze Ltd. (LSE: BLZ) chairman Eli Reifman will stay in jail until he fulfills the court order to transfer his shares in the company to its special administrator, Eitan Erez. The court upheld the sentence by Tel Aviv District Court Judge Varda Alshech.
Supreme Court judges Dorit Beinish, Edmond Levy, and Asher Dan Grunis ruled, "We found no reason to intervene in the findings… We were persuaded that the petitioner did violate the order."
The judges added, "We believe that the petitioner did not take the minimal measures to execute the order… The petitioner's claim that he could not act while in jail is not persuasive. There is nothing to prevent the implementation of the necessary measures for the transfer of the shares even while in jail."
The judges had some reservations about the case. "It seems to us that there was no reason to order that for each additional day in violation of the order, the petitioner's sentence would be extended by two days without an additional hearing. The purpose of Article 6 of the Contempt of Court Ordinance is to compel enforcement of an order, not to punish the violator… Therefore, this section of the court decision will be cancelled."
The judges noted, "The District Court Judge does not have the power or the authority to continue to order the undertaking of various measures aimed at compelling compliance with the order, including continuation of the imprisonment… It would be worthwhile that when a court orders imprisonment for contempt of court should conduct regular reviews in order to verify that the continued imprisonment is fulfilling its purpose."
Reifman can take some solace from the part of the Supreme Court ruling, which stated, "The order with regard to the voiding of the two-day imprisonment for each day in violation of the order beyond the original 45-day sentence is cancelled… The Court should shorten the period and set a date for a hearing before it is completed. The keys of the prison are in the petitioner's hands."
Reifman has been in jail for three weeks for refusing to hand over his Emblaze shares to Erez, whom Judge Alshech appointed to administer the company.
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2009
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