Rozenberg threatens El Al board with defamation suit

El Al plane  / Photo: Yoav Yaari
El Al plane / Photo: Yoav Yaari

Eli Rozenberg, who has bid to buy the airline, has warned through his lawyer that he could "call to account all those who are defaming him."

The angry exchange of letters between the lawyers representing El Al Israel Airlines Ltd. (TASE: ELAL) board of directors and Eli Rozenberg, who has bid to buy control of the airline, is heating up. Rozenberg's lawyer has even threatened on behalf of his client to file a defamation suit against members of the El Al board.

In a letter sent yesterday by Adv. Dori Klagsbald, who represents El Al's board of directors, the board agreed to meet with Rozenberg, who has received a permit from the State to buy control of the airline. Klagsbald wrote, "My client requests that your client should participate personally in the meeting. It is not clear why your client should not answer the basic questions we shall ask simply and clearly about the lack of an answer to the question of whether in the acquisition process your client in fact represents his father and/or other investors, and a lack of detail concerning his financial and business capacity."

Klagsbald refers to Eli Rozenberg's offer to buy control of El Al without presentations for NIS 260 million. Rozenberg is the son of US-based businessman Kenny Rozenberg, whose business is mainly in medical services.

What most angered Rozenberg was that his lawyer Adi Zaltzman of Shibolet Co. was asked for a response concerning a legal proceeding that took place in the US between the US federal government and the State of New York and Rozenberg's father Kenny Rozenberg's company Centers Plan for Healthy Living. Klagsbald stated that Centers Plan for Healthy Living "filed, and caused third parties to file, false claims to obtain money from state authorities," and that "in the settlement to remove the fraud allegation made against it, the company owned by Rozenberg agreed to pay to the US federal government and to the State of New York compensation in the sum of $1.65 million to remove the claims that it had defrauded the state… My client requests to receive for its perusal the statements of claim in connection with the abovementioned proceeding."

Adv. Zaltzman replied today on behalf of Eli Rozenberg, "This is a cynical attempt by El Al's controlling shareholders to exploit their control of the board of directors to sabotage every measure to bring about the loss of their control of El Al even at the price of harming any process that may save it from insolvency."

Zaltzman added a warning from Rozenberg to the El Al board, which 'is again and again ignoring its obligations," and that ,"after the coming collapse of El Al we won't hesitate to settle accounts over their actions and mainly their errors that will bring about damage of El Al's chances of repaying debt to its creditors."

Regarding the El Al board's questioning of the identity of the buyer, Rozenberg's attorney writes that the decision by the Government Company's Authority to grant him a permit to buy El Al, "should close the book on claims, questions and groundless hints on this matter. And to put things in order, the father of our client is not the investor, and he is not expected to hold shares in El Al either directly or indirectly."

Rozenberg's attorney continued, "Not for long will he continue to restrain himself at the attempts to defame him and he intends to call to account all those personally involved."

Adv. Zaltzman ends by requesting that Rozenberg's meeting with El Al's board including its external and independent members take place this week.

Meanwhile El Al is pushing ahead with a planned $150 million public offering of its shares by the end of August, after which the airline can receive $250 million in bank loans with 75% State guarantees. The government is committed to buying the shares that the public does not and it is thought likely that the airline will be nationalized.

Rozenberg's representatives declined to comment on why he was not prepared to simply wait and buy most of the shares in the public offering.

Published by Globes, Israel business news - - on August 11, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

El Al plane  / Photo: Yoav Yaari
El Al plane / Photo: Yoav Yaari
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