Legal Updates

It is possible to hold international insolvency proceedings in Israel and to recognize a foreign official as an official in Israel

June 1, 2024

An official in a bankruptcy proceeding in Australia requested to recognize the proceeding in Israel in order to trace all of the debtor's assets in Israel, and to receive complete information and documents, including from third parties, due to the suspicion that the debtor intends to smuggle a residential apartment he owns.

The Court recognized the bankruptcy procedure in Australia as a procedure in Israel and ordered the freezing of procedures against the debtor in Israel, the suspension of any transfer of a right to the property or its lien and other orders related to the procedure. Israeli insolvency law recognizes international insolvency proceedings to prevent debtors from hiding assets or transferring them to foreign countries in order to defraud creditors. Accordingly, a foreign official may submit to the Israeli Court a request for recognition of the foreign proceeding when he details all the foreign proceedings known to him, which are ongoing regarding the debtor and the documents of the foreign proceeding. Here, there is room to order the recognition of the procedure in Israel in line with the purposes of Israeli law to allow the management of international insolvency procedures.