IDB Holding Corp. Ltd. (TASE:IDBH) and chairman Nochi Dankner are returning legal fire. In response to the joining of forces by the bondholders representatives of IDB Holding and its subsidiary, IDB Development, with the goal of wresting control from Dankner, the two companies yesterday petitioned the court to dismiss out of hand the petition for a "hostile takeover" entitled "A petition for the recovery of IDB Development Corporation", which the creditors filed on April 21.
The petition by IDB Holding and IDB Development states:
- The proposed "settlement" in the petition is unacceptable to the company, and there are no legal grounds for imposing the "settlement" on the company without its consent. The court has no authority to force the company to change the agreements with its creditors.
- The proposed settlement assumes, as a basis, that the company is insolvent, when there is no disagreement that, as of the date the petition was filed, the company met and meets its commitments in full, and it states that it has the wherewithal to continue to meet its future commitments. A proceeding of a petition for an arrangement is not the right proceeding in which to examine the insolvency of the company.
At this point, IDB says that the agreement between the bondholders representatives reveals to everyone the true intention, that lay, and lies, behind the petitioners' petition: Why do the creditors wish to take over control of IDB when they claim that it is insolvent? Why did the company's bondholders representative agree to deepen the deep hole of over NIS 1.5 billion by hundreds of millions of shekels more?
The answers to these questions are straightforward, says IDB. The respondent is not, and has never been, insolvent. On the contrary, the respondent has billions of shekels more assets than in liabilities. The claim of insolvency was and remains a false claim, the sole purpose of which is to serve as grounds for undermining the stability of the group in order to take over its assets.
"For this reason, the company's bondholders representative is prepared to 'generously' set aside hundreds of millions of shekels for the bondholders. The respondent's surplus of assets is so great that the company's bondholders representative is prepared to pay a fee of hundreds of millions of shekels to benefit from the balance of the surplus which amounts to billions.
"There is no doubt that the 'representatives' agreement', including the planned discount, the improper way it was drawn up, the entangled interests which acted in this matter, and so forth, will eventually face clarification before the court, and this is not place to elaborate on it. Nonetheless, it seems that one clear and unequivocal conclusion emerges from the making of the agreement, and even more from perusal of its details. The conclusion is: the respondent is a stable and solvent company."
Published by Globes [online], Israel business news - www.globes-online.com - on May 27, 2013
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