Denmark is the homeland of Hans Christian Andersen, the famous legends author. Danske Bank is one of the largest banks in Denmark and I represented an Israeli bank in negotiations for an agreement based on the ISDA Framework Agreement (an international organization that created a template for such transactions). It was difficult to explain to Danska some of the changes that were required by me because in Israel, if you will it is no dream - a bank can collapse because of a lack of conformity of the court system in general (and in the area of liquidation in particular) to the economic world.
Among other specialties of our firm we operate in financial transactions, including over-the-counter transactions based on the ISDA framework agreement, which states, among other things, that a liquidation request that has not been canceled within a short time constitutes a breach of the agreement and puts all the transactions under immediate repayment. Moreover, a breach of one agreement constitutes a breach of all other framework agreements signed by the bank (vis-a-vis any entity in the world) and placing all the transactions on them for immediate repayment - this is not a children's legend, it's a nightmare!
If the ISDA format from 1992 was a grace period of 30 days (and even then I used to demand its extension), in the format of the agreement from 2002 the period was shortened to 15 days. A foreigner will not understand why a false claim filed in Israel will be discussed only after many months and after an unnecessary ping-pong game in which the court will make a decision to send each document to the counterparty's response or response. Substantively, an urgent hearing will be set up to protect the creditors, but when the proceeding is expected to be a false proceeding (and it is reasonable to assume that a request for liquidation against a bank would be a case), the court (or the general manager) is not in a rush. This is the time to ask for comments, to set a discussion for a few months ahead, and if we are dealing with court holidays, time is certainly not urgent.
The problem is that filing a dissolution motion against a body sometimes has disastrous consequences. Even if we do not go far to complex ISDA-based financial transactions, filing a liquidation will immediately bring down the company's credit rating in D & B and similar indices and could bring disaster on the company if it is not rejected within a short time. It is appropriate to enact regulations that will determine short dates, increase the number of judges handling liquidation, and establish a mechanism that will ensure the existence of the regulations by the judges and the transfer of judges who do not comply with the regulations. After all, there is no big difference between a judge who is negligent and a doctor who is negligent. In both cases, fate depends on this, and in the judge's case, the results can affect many more.
Until then, as long as you want to blackmail a company in Israel, you only have to threaten to submit a baseless liquidation motion. In the current situation, especially with regard to banks and financial institutions that have signed the ISDA agreements, this is a threat that should not be taken lightly.
Published in Afik News 083 31.08.2011