It is now official: Bank Hapoalim (TASE: POLI) has decided to institute bankruptcy proceedings against Eliezer Fishman. Led by chairman Oded Eran, the bank's board of directors convened today and decided to support management's stance in favor of moving towards bankruptcy proceedings, instead of conducting negotiations for improving the debt arrangement. "The proposal communicated to us concerning an arrangement with Fishman's creditors is unacceptable to Bank Hapoalim. The bank's view has always been, and still is, that all legal means should be employed against Fishman, including the instituting of bankruptcy proceedings against him," a letter signed by Bank Hapoalim business corporate banking head Jacob Orbach states.
Fishman owes Bank Hapoalim NIS 1.8 billion, making it his biggest creditor. At the end of Tuesday's creditors meeting, it was decided that the bank would negotiate for 30 days in an attempt to improve the arrangement, the current structure of which includes writing off 80% of the debt. The bank quickly made it clear, however, that it did not intend to conduct such negotiations, and its position became official today with the approval of the board of directors. The bank's opposition to negotiations for improving the creditors' arrangement and the opposition of the other banks to the arrangement pave the way for instituting bankruptcy proceedings against Fishman, whose debts total over NIS 3 billion.
It now appears that the banks are headed towards bankruptcy proceedings, but having Fishman declared a bankrupt is still a long way off. Such a proceeding is likely to prove prolonged and difficult, and can be stopped at any stage in an attempt to reach a new settlement. It cannot be ruled out that the banks will wait until the hue and cry dies down and the public's attention is distracted by other matters before coming to an arrangement, which will be presented and explained as the best alternative for the banks and the public - the banks' principal shareholder.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 8, 2017
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