Civil Appeal 8332/16 - BTB Discount Transaction
- This appeal also revolved around a "back-to-back" loan transaction. On January 2, 2007, Discount Bank provided a personal loan to Boaz Yona in the amount of ILS 20 million; And Boaz Yona, for his part, transferred the entire loan amount from his personal account to the bank account of Hefzibah Investments. Hefziba Investments in Torah deposited the funds in a closed deposit, which was pledged in favor of Discount Bank as a guarantee for the repayment of the loan given to Boaz Yona (above and below): Transaction BTB Discount).
For the purpose of entering into a transaction BTB Discount signed Hefziba Investments (through Mordechai Yona) to "Framework for creating a back-to-back transaction (BACK TO BACK) - Deposit against a loan" (hereinafter: Framework Letter), according to which the latter undertook to Discount Bank, inter alia, that the deposit would be subject to "The rights of lien and mortgage, lien and offset, in the first degree, alone and exclusive, without limitation, to your right and benefit as collateral and guarantee for the payment/repayment of the loan and all related charges according to your records at any time, and we will not be entitled to withdraw the deposit and/or take any action on it for the duration of the entire period until the settlement and repayment of the secured debt (the loan) according to your records at any time and at your discretion only". This undertaking was approved by a lawyer on behalf of Hefziba Investments, on the framework statement itself, who declared that Mordechai Yona is authorized by his signature to obligate Hefziba Investments "This is by virtue of decisions made in accordance with any law of the authorized organs of the customers and by virtue of the incorporation documents of the customers who fully understand the content of the aforementioned document, in such a way that the aforementioned document is valid and binding on the customers vis-à-vis the bank and can be enforced against the customers for the purpose of each and every matter". Hefziba Investments (through Mordechai Yona) also signed a bond in favor of Discount Bank, which was given to secure the loan that the bank provided to Boaz Yona, and by virtue of it, a lien was imposed on the deposit in favor of the bank (hereinafter: The bond); It should be noted that in contrast to the BTB Mizrahi, this lien was registered by Discount Bank in the Companies Registry on January 3, 2007.
- Similar to Mizrahi Bank, with the collapse of the Hefziba Group, Discount Bank made the loan to Boaz Yona available for immediate repayment - In the meantime, on August 2, 2007, he "broke" the deposit in Hefzibah Investments' account on his own initiative, and used the amount he had accumulated (ILS 20,540,164) to cover Boaz Yona's debt to the bank. More than six years later, in January 2014, the Special Director submitted a request for instructions in the framework of the liquidation proceedings of the Hefziba Group - The District Court was asked to obligate Discount Bank to return to the liquidation fund the funds it withdrew from the deposit. In summary, the special manager reiterated all of his arguments regarding the BTB Mizrahi also regarding the BTB Discount (with the required changes) - Except for the claim that the disguised pledge created by the parties should be canceled, since, as noted, Discount Bank registered the lien on the bond in the Companies Register.
In view of the similarity between this proceeding and the proceeding in the transaction BTB Mizrahi, during the hearing before the District Court, the parties reached an agreement whereby the request of the Special Director to issue instructions would be rejected; For they will see"on the reasons given and which were the basis of the first judgment (in the case of the BTB Mizrahi-A.B.) as the reasons underlying the rejection of this application, without the court addressing additional arguments of the respondent as aforesaid (Discount Bank-A.B.)"; and that the Special Administrator will be entitled to appeal the judgment rejecting his application regarding the BTB Discount, in which case the parties' arguments will be reserved for them before the appellate court. These agreements were given effect by a judgment on July 21, 2016 (Liquidations 1549-01-14) [Published in Nevo].