This week's ruling by Central District Court Judge Ilan Shilo, which pushed the trustees for the Mega retail chain towards Yeinot Bittan as the purchaser for Mega's 127 branches, did not make Rami Levy, who controls Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI), give up. Today, he filed an urgent motion asking the judge to order the trustees and the antitrust commissioner to present the upgraded bid he declared at the end of this week's court hearing, which is NIS 100 million above Yeinot Bittan's bid, to the Mega creditors. Levy also hints at improper conduct by the trustees, stating, "Contrary to the stance presented as the trustee's opinion, the regulatory risk in the Yeinot Bittan bids is greater than the risk in the Rami Levy bid."
Levy is attempting to open another front in the District Court, while Moti Ben-Moshe, another disappointed bidder, is saying that he will appeal to the Supreme Court. The Levy side is therefore trying to alter the court ruling before the Supreme Court appeal is filed, assuming that one is filed. The way the petition was filed is regarded as surprising: it is being called an "urgent motion," i.e. it amounts to an appeal against the ruling made by Judge Shilo after hearing the parties' pleas, and so is liable to draw a rebuke from the judge for the attempt to reopen a ruling made other than through an appeal. The motion was filed through Rami Levy's lawyers: Advocates Yaron Elhawi, Kfir Yadgar, and Avner Finkelshtein of the Gornitzky & Co. law firm.
Levy is asking the judge to order the Mega trustees to present his improved bid to the creditors, in order to enable the creditors "to not merely approve the bid as an alternative, but also to prioritize, rank, and choose among the alternatives in the event that the antitrust commissioner approves both the Rami Levy bid and the Yeinot Bittan bid."
A bid that is good for the creditors
When the judge ignored Rami Levy's offer to increase his price by NIS 100 million, he raised quite a few eyebrows, even though the bid seemed like a casual afterthought during the legal hearing, which did not contribute to making the judge take the bid seriously.
Tiv Taam controlling shareholder Hagai Shalom and former Minister Shalom Simhon, whose bids also failed to win thecCourt's recommendation, told "Globes" that the Antitrust Authority's opposition to the Rami Levy deal without taking a similar stance towards Yeinot Bittan was astonishing. "The cases are identical," they said, asserting that some degree of injustice was done to Levy. In this respect, the motion filed today by Levy stated, "The court should order that the same time period allocated by the antitrust commissioner for considering the Yeinot Bittan bid should be used for the considering the Levy bid, and that the commissioner's rulings on the Yeinot Bittan and Rami Levy bids should be issued simultaneously."
The motion also stressed that Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) believed that its superior bid presented in the hearing should be presented with all the bids at the meeting, and that the creditors should be allowed to choose any of them. The creditors meeting is scheduled for next week, and Levy is trying to change the decision: "In his ruling, the honorable judge referred to the difficulty in comparing the various bids, and Rami Levy therefore wishes to submit a bid identical to the Yeinot Bittan bid in all respects, with the unconditional addition of NIS 100 million."
This is a 25% addition to the Yeinot Bittan bid, all of which should find its way to the pockets of the unsecured creditors and create a choice between two identical bids, or more precisely, between two identical bids one of which is NIS 100 million higher than the other.
The motion also refers to the actions of the trustees in the case: "With all due respect, the trustees' claim that the risk incurred in the Rami Levi bid is greater is groundless," the motion states, since "First of all, the liquidators' claim was said to have been based on a 'telephone conversation' in which what was said and in which contexts cannot be determined, not on a conclusion arising from a proper proceeding. A letter sent by our representative, Rami Levy, to the antitrust commissioner and the latter's answer, which are attached as appendices to this letter, clearly show that this (preliminary, of course) position by the antitrust commissioner, which was presented in the Antitrust Authority's letter dated March 9, 2016, and in a hearing before this honorable court on May 17, 2016, was exactly that, and nothing more. There is no mention of a 'mysterious telephone conversation' with the trustees or any one of them, so that even if such a conversation did take place, and insofar as something was said in it, it played no role in the Antitrust Authority's position." Summing up, Levy's lawyers note, "We have before us a significantly improved and superior bid, and a golden opportunity to substantially and clearly improve the distribution in the liquidation, which will be accepted by the unsecured creditors, who have suffered the most from the momentous collapse."
Levy's representatives also asked Antitrust Authority legal counsel Adv. Ori Schwartz today to consider the merger of the Rami Levy chain with Mega. "Considering the extremely short time allocated to the antitrust commissioner for considering the merger, our client is asking the Antitrust Authority to immediately commence consideration of the Rami Levy bid, without waiting for the court to rule on the motion. The court ruling on the motion will in any case be issued only in a few days, so waiting for the court ruling will cause the loss of very valuable time, and will not leave a reasonable amount of time for consideration of the Rami Levy bid," the request stated.
The Mega trustees and the Antitrust Authority chose not to respond to the request.
Published by Globes [online], Israel business news - www.globes-online.com - on May 19, 2016
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