Have Eduardo Elsztain's days as the controlling shareholder of IDB Development come to an end? A hearing before Judge Hagai Brenner in the Tel Aviv District Court ended without agreement between the sides, and they now await the judge's decision on whether to appoint a trustee on behalf of the court to take over management powers at IDB. In the view of some of those who participated in the hearing, Judge Brenner will accede to the request of the IDB bondholders to appoint a trustee.
Elsztain bought control of IDB six and half years ago in the context of a debt settlement, and since then he has injected some NIS 3 billion into the holding company, an investment that now looks lost. IDB's total debt to its bondholders is some NIS 2 billion.
Today's hearing dealt with the request of the trustee of the series 9 bondholders of IDB that the court should appoint a trustee to take over the affairs of the company because of its insolvency. The trustees of the other two bond series (14 and 15) did not oppose the request, but they demanded that a separate receiver should be appointed for the assets mortgaged to them.
The request was opposed by IDB Development itself and by Elsztain (through Dolphin, through which he controls IDB), who argued that there was no need to rush to appoint a trustee, and asked the court for an extension of a few weeks to exhaust negotiations with the trustees of the three bond series.
At the opening of the hearing, the judge asked counsel for the series 9 trustee, Adv. Amit Pines, whether he would agree to a delay of a few weeks if Elsztain would inject into the company the NIS 70 million he had undertaken to inject by September 2. Adv. Pines replied that he would, on certain conditions. When the question was put to Dolphin's counsel Adv. Ehud Sol, he responded that he could not speak for Elsztain, who was in Argentina.
Later in the hearing, after contacting Elsztain, Adv. Sol said he was proposing an immediate injection of NIS 35 million, in exchange for the agreement of the bondholders to freeze legal proceedings until mid-December to give time for negotiations.
Published by Globes, Israel business news - en.globes.co.il - on September 24, 2020
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