The Court has temporarily blocked the monies due to Gad Zeevi from the sale of Elisha Hospital
The court accepted Discount Bank’s motion, which claims that Zeevi owes it 22 million dollars
24.08.17 | Ella Levi-Vinriv
Another businessman is caught in the jaws of bankruptcy proceedings. Haifa District Court yesterday (Wednesday) agreed to a bankruptcy warning petition filed by Bank Discount against businessman Gad Zeevi in respect of Zeevi’s alleged debt to the Bank of approximately 22 million dollars. Justice Nasser Jahshan, in an ex parte hearing, also issued a temporary injunction order and a temporary attachment order against the monies due to Zeevi from the sale of Elisha Hospital in Haifa, which he owns.
About two months ago, businessman Zvika Barenboim purchased Elisha Hospital from Zeevi for about 180 million shekels. Barenboim purchased the activity of the largest and the leading private hospital in the north of Israel, although the deal did not include the hospital building, which remained under Zeevi ownership.
Through attorneys Assaf Englard and Zohar Ilan, of law firm Hamburger Evron & Co., Discount Bank claims that Zeevi has a debt to the Bank according to an agreement that was validated by a judgment, requiring Zeevi to pay the Bank approximately 31 million dollars. According to the Bank, Zeevi had to conclude payment of the debts by December 2016 but, as of today, Zeevi’s balance of debt to the Bank remains at about 22 million dollars.
According to the petition, Zeevi’s alleged debt is a debt from 2005; and that already in September 2005 the Bank initiated legal proceedings against Zeevi and Inpecos A.G., demanding payment of their debts to the Bank for loans granted to them. In 2006, the Tel Aviv District Court sanctioned as a judgment a compromise agreement signed between the Bank and Zeevi and the company, in which the company and Zeevi (as guarantor of the company’s debts) were required to pay the Bank approximately 31.7 million dollars, in accordance with the payment timetable determined in the judgment.
Also, according to the judgment, the final payment was supposed to have been made by December 2016. But, according to the Bank, “Unfortunately, the company and the debtor did not comply with the judgment, and did not make the payments due on December 31, 2016, in flagrant violation of the judgment.”
A resounding acquittal regarding Bezeq
According to Discount Bank, the proceeds from the sale of the Elisha Hospital are due to reach Zeevi’s pocket soon, and there is reasonable concern that Zeevi will try to smuggle these monies out, thus foiling repayment of his debt to the Bank. The Bank noted in its petition that “In light of the fact that the debtor did not meet payment of his debts to the Bank, and did not inform the Bank of his intention to not comply with the terms of the agreement, there is substantial concern that once the debtor becomes aware of the issue of a bankruptcy warning notice against him, he will take steps to smuggle out the proceeds from the Elisha Hospital transaction before attachments are imposed.”
The Bank also claims in the petition that while Zeevi is in practice the controlling owner of the Elisha Hospital, publications from 2014 show that the Meitav Dash investment house gave Zeevi a private loan of about 100 million shekels, and Zeevi pledged the Hospital and other assets he owned in favor of the investment house. According to Discount, “Examination of the Elisha company record in the Company Register showed that on November 30, 2014, a lien was registered in favor of Meitav Dash on the entire rights of the Elisha company in the hospital.”
It is further claimed that the Hospital is held by companies of which Gad Zeevi, his wife Talia, and his son Gur are directors. According to the Bank, according to the reports of Japanauto, the company that holds all the companies below it, it is a foreign company registered in the British Virgin Islands, and all its capital is owned by a family trust that is registered in Lichtenstein, “whose ultimate beneficiaries are the wife of Gad Zeevi and his four children.” Therefore, the Bank claims, “All these examples show that the controlling shareholder in the Elisha company in practice is actually Gad Zeevi; and thus, accordingly, the money for the proceeds due from the Hospital transaction are expected to directly or indirectly reach the pockets of the debtor himself.”
The Bank Discount petition is not the first time a notice for declaration of bankruptcy has been filed against Zeevi. The Bank mentions in its petition that back in 2012, a bankruptcy proceeding against Zeevi was initiated by Tenida Anstalt, and again in 2015. Tenida Anstalt, owned by the tycoon Michael Chernoy, filed a bankruptcy warning petition against Zeevi then, claiming he owed it approximately 55 million dollars, in respect of monies that Chernoy had transferred to Zeevi as part of the acquisition of shares in communications company Bezeq. Chernoy had in the past given Zeevi financing to purchase Bezeq shares, and the two were later indicted on the grounds that they had concealed this fact from the Ministry of Communications and the banks, as well as the option that Chernoy had to become a partner in Bezeq.
Last year, 16 years after the transaction in which Gad Zeevi’s group of companies acquired the Bezeq shares; 14 years after the start of the investigation, and 11 years after the start of the criminal case around that transaction – the two won a resounding acquittal from the charges against them, and it was even ruled that the State compensate Zeevi and Chernoy about 300 thousand shekels each for the injustice caused them by the criminal proceedings held against them.
Simultaneously with the criminal trial, Chernoy filed a bankruptcy suit against Zeevi, until the two agreed that Zeevi would pledge assets he owned to the company owned by Chernoy, in order to stay the proceedings.
In the Discount Bank petition filed yesterday with the court, it was further noted that the Bank had only recently become aware that while Zeevi made representation to the Bank that he was unable to pay his debts to the Bank, the debtor (Zeevi) pledged assets of companies under his control to cover other debts to a third party, for an amount of more than 130 million dollars. “This matter raises a heavy concern that the debtor made false misrepresentation of his total assets to the Bank, in order to perform a wrongful preference of creditors.
Gad Zeevi said in response: “We do not respond through the press."