Tao Tsuot Ltd. (TASE: TAO-M) controlling shareholder Ilan Ben-Dov is fighting back against the bondholders' representative, Adv. Lipa Meir, as they battle over his proposed debt settlement for the investment house. In a letter to Meir, Tao accuses Meir of trying to organize a confrontation against Ben-Dov at Tao's expense, and threatens to settle accounts with Meir.
Tao bondholders are demanding that Ben-Dov inject NIS 10 million into the company to cover the money that Tao transferred to Excellence Investments Ltd. (TASE: EXCE), controlled by Yitzhak Tshuva, after Excellence called in a NIS 16 million loan to the company. Excellence withdrew the demand for immediate repayment upon receiving the money. Ben-Dov asked Tao's bondholders to approve the transfer from Tao's account, but Meir rejected the request, saying that it was giving priority to certain creditors. Ben-Dov capitulated, paid the NIS 10 million himself, and launched an attack on Meir.
Tao accuses Meir of trying "to wage a confrontation against the controlling shareholder on Tao's back, a confrontation that Tao has made every effort to avoid, especially since the controlling shareholder has submitted an offer for a settlement. It should be emphasized that the controlling shareholder fully supports the company."
Tao is also threatening Meir with legal action. "If damage is caused to Tao as a result of these proceedings, the full responsibility for this damage will fall personally on the representative… or on those who operate on its behalf, and Tao till use every option available to it to fulfill the law and its rights."
Ben-Dov is offering to allot 24% of Tao to the bondholders in exchange for the company's NIS 423 million debt to them. At the same time, he will transfer his holdings in Suny Electronics Ltd. (TASE: SUNY), the indirect controlling shareholder in Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR). However, the plunge in Partner's share price in the past month, and Meir's objections to the offer, is forcing Ben-Dov to reconsider it.
Published by Globes [online], Israel business news - www.globes-online.com - on August 28, 2011
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