A company sought that the Tel Aviv Stock Exchange (TASE) will not declare it as a shell company so that it could sell its shell in order to pay its creditors from the sale proceeds, because this would mean the reduction of trading on the TASE and the loss of the value of the company’s shell.
The Court accepted the company's motion and held that the company should be entitled to sell its shell. The TASE Regulations states that a company that has no real business activity or a company which 80% or more of its total assets are funds that do not confer control under Israeli GAAP, will be deemed a shell company. When a company is deemed as such and the conditions required for the resumption of trading have not been met, its shares are transferred to a conservation list which means limited trading. Here, although the company meets the definition of a shell company, its inclusion in the conservation list, will harm the value of the shell, which is the company's only asset. Therefore, despite the TASE Regulations, the company should be entitled to sell its shell, in order to be able to pay its creditors.