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A foreign insolvency proceedings may be recognized in Israel if managed in the jurisdiction of center of business of the debtor

June 16, 2021
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A receiver of an insolvency proceeding of a debtor in Russia moved that the proceeding be recognized in Israel, even though the debtor was discharged of debts in a proceeding held in England and the Court in England held that the center of business of the debtor is in England.
The Court held that the insolvency proceedings in Russia is to be recognized as a foreign proceeding. To recognize in Israel a foreign insolvency proceedings, it needs to be conducted in a foreign country that is deemed the debtor's center of operation. Here, the majority of the debtor's business were conducted in Russia, his debts were created in connection with his business activity in Russia and his creditors are located in Russia. Indeed the Court in England held that the debtor's business center is in England but those holdings are no obligating the Israeli Court. As to the issue of the discharge in England, this needs to be discussed in the Russian Court that holds the bankruptcy proceedings. Therefore, the proceeding in Russia should be recognized in Israel despite of the discharge granted to him at the proceeding held in England.