On James Bond and Official Receiver 2021 – The unsettling easiness of a financial murder in Israel

On James Bond and Official Receiver 2021 – The unsettling easiness of a financial murder in Israel

November 13, 2021

In June 2010, I published an article in the The Marker titled "The unsettling easiness of a financial murder in Israel" in which I compared James Bond, a killer in the name of the Queen, to the Israeli Official Receiver. The first deliberately eliminates enemies of the Kingdom and the second negligently eliminates businesses and companies. Ten years have passed but in Israel nothing has changed.

Ten years have passed, three James Bond films, one Daniel Craig, one “Q” that came out of the closet in 2021, Prince Philip passed away, unfortunately, and England sailed away from the EU, but all in all, all remained the same. In Israel, however, a revolution! ... well, sort of …
In 2018, the Israeli legislature replaced the Bankruptcy Ordinance (clearly an unsexy name!) With a law with a beautiful name: "The Insolvency and Economic Rehabilitation Law." Accordingly, also, the law renamed the Official Receiver, in the context of bankruptcy to: "Commissioner". The person who is the "Bankrupt" was also renamed to "the individual" (in Hebrew it also means “the only one”). In this case (and only in this case) there is also a real reason for the name change. He is, simply, the only one who really cares about the proceedings.

But beyond the name change, the “opinion” of the "Commissioner" is still required in every procedure and the opinion of Commissioner is still redundant. The “opinion” is not based on anything other than, it seems, a summary by a junior lawyer of the "facts" that others have written. After all, what opinion can one have without any research body, without manpower with economic understanding (unlike the Antitrust Authority that employs lawyers and economists and its positions are based on market research and study) and is a busy body so that its reactions only delay procedures that ought to be fast and efficient.

Thus, for example, in a case in which we represent a businessman against whom a bankruptcy petition was filed, the Court tried to mediate between the creditor and the debtor and when failed, granted, oddly enough, an order to open bankruptcy proceedings. The creditor's lawyer later confirmed to us that the entire purpose of the proceeding was to apply pressure and the creditor never intended for the businessman to be declared bankrupt. For this reason, the same creditor also agreed to reduce the debt by ILS 1 million, just to try to stay the proceedings. The lawyer of the Commissioner was late in filing responses, delayed the proceedings, gave an “opinion” to the Court that had nothing in it but repetition of “facts” already stated by others (but drafted as a decision, or an order to the Court, instead of as an opinion) and even when the businessman deposited ILS 600,000 in the "Commissioner" bank account as a condition for staying the bankruptcy proceedings (in accordance with the settlement reached in the appeal hearing, to which the Commissioner's representative "forgot" to appear), it took the Commissioner over a week, two Court motions and a personal application to the Official Receiver herself, to confirm that the money was received and the proceedings can be stayed (i.e. the businessman was "bankrupt" for 8 days for no reason other than the Supervisor's negligence).

So what is the solution for the next ten years? It is high time to turn the "Commissioner" into what it should be: an entity in charge of appointed receivers and like the Attorney General, a party only to proceedings where it actually has something to say. In particular, (even if this requires a legislation change) one need to set a maximum hourly wage for receivers and monitor that they do not waste unnecessary hours for no reason. Ultimately, the receiver's salary (currently calculated as a percentage of the bankruptcy portfolio) is an incentive for receivers to promote bankruptcy proceedings instead of rehabilitation and the victims of this are the debtors but also their creditors and the economy as a whole. And just like 10 years ago: until this is done, as much as you want to blackmail a businessman in Israel, all you need to do is to threaten to file a false bankruptcy petition.