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Globes: An attorney of a purchasing group who also serves as a receiver is not entitled to double security

July 24, 2017

An article about winning a case by Afik & Co., which serves as a receiver for apartments. The article was published on July 24, 2017, by Ella Levy-Weinrib in the Globes newspaper
[Hebrew Only]

An attorney of a purchasing group who also serves as a receiver is not entitled to a double fee
The decision was made as part of a fee hearing to which Adv. Shmona is entitled as a receiver for two apartments registered in the name of the minor daughters of a famous figure.
These are Levi-Weinrib
A lawyer for a purchasing group cannot receive a double fee - both for his role as receiver of apartments in the project and for his role as the legal advisor of the purchasing group - the Tel Aviv Family Court ruled last week (Tuesday).

The decision was made as part of a fee hearing to which a lawyer appointed as receiver of two apartments registered in the name of the minor daughters of a famous figure, who is currently starring in the media, is entitled.

At the heart of the discussion was a dispute that arose between the two receivers appointed for the sale of the apartments regarding the fee that should be paid to one of them. One of the lawyers also served as the legal advisor of the project in which the apartments are located, and signed the buyers of the apartments to a standard agreement, according to which he will be paid a fee at the rate of 1.5% of the value of the apartment they purchased. This, in addition to his fee as receiver of those apartments.

The story began in December last year, when Adv. Doron Afik, who represented the father of the minors whose apartments are registered on oil, was appointed receiver for the sale of the apartments. In May this year, another receiver was appointed, Adv. The apartments.

However, during the drafting of the draft agreement for the sale of the apartments, a dispute arose between Afik and Hajjaj regarding the question of whether the latter is entitled, in addition to the fee as a receiver by law, to the agreed fee set forth in the purchase agreement.

Advocate Hajjaj clarified that this is a standard agreement signed by all the buyers in the project, which entitles him to a fee of 1.5% of the value of the apartment (for the purchase of the right to the apartment, and also for the sale of the right if the buyer does not meet the terms of the purchase agreement).

Following the dispute, Adv. Afik applied to the Family Court for instructions in this matter, in which he objected to the payment of the agreed fee to Adv. Hajjaj. Adv. Afik argued that there was no justification for the payment of the additional fee to Adv. Hajjaj, since he did not perform any exceptional work beyond his normal role as receiver on behalf of the court. Beyond that, he added, the procedure of selling the minors' apartments was done by virtue of an express order of the court as part of the appointment of receivers, and therefore the sale operation was required to perform the job, if appointed properly, and certainly does not justify additional fees.

During the hearing on the subject, Adv. Afik Avi Avrahami-Erez from the office of Adv. Eitan Erez, who serves as a special manager for other properties owned by an artist of the minors, also joined Adv. Afik's objection to the payment of the additional fee. The two oil-listed apartments of the minors are actually owned by the mother.

Advocate Avrahami-Erez also commented at the hearing that the payment of the additional fee will be deducted from the amount that should be kept for the benefit of the mother's creditors, and that the court must also take this fact into account.

On the other hand, Adv. Hajaj claimed - through Adv. Amiad Goldberg from the office of Tzachi Hajaj - that contrary to the claim, this is not a double fee at all. "The payment to the receiver is not double. The sale in this case is of rights to an apartment in a purchasing group - this is a different procedure from a standard sale. The person who manages the transaction and the actual procedure are the project's legal advisers, who are completely different from the receiver. They are the ones who actually do most of the actions. "

Judge Erez Shani states that the receiver serving as legal counsel for the project is not entitled to double the fee. "The remuneration of the receiver stipulated in the regulations also includes the preparation of a sales agreement and the lawful termination of its registration. ".

The court rejected Advocate Hajjaj's explanation that this is not an ordinary transaction, and that the legal advisors accompanying the purchasing group are part of the project. "By the way, there is no need to pay both the receiver and the transaction, as a double payment, in full It stems from the identity between which of the conveners and the legal advisers of the project, who due to the procedure they took, the conference came into being. "

The judge further added that the fact that a receiver would not be entitled to recognition of the expense of taking another lawyer for the purpose of drafting an agreement, is "doubly true" when it comes to a procedure that is part of liquidation and bankruptcy proceedings.

In addition, the judge justified the contention that "not only the district court but also the family court dealing with the insolvency proceeding must take into account the interests of the creditors, and may not disregard them."

The court concluded: "The enrichment of the receiver unnecessarily at the expense of the creditors is not a matter of procedural fairness or the fairness of the law. Certainly in insolvency proceedings officials should not be harmed by their salaries, Acquisition ... does not entitle the receiver to taking (salary for - A. L.V.) additional legal advice, and is not different for the purpose of ruling on the salary and collection expenses from the sale; What's more, this is (in the case in question - A. L. ") the sale of a second-hand apartment."