A person borrowed funds and part of the money was immediately paid to a company held by the lender to repay the debts of the company held by the borrower. A short time later the borrower entered bankruptcy proceedings and the receiver demanded to cancel the fund transfer to the company held by the lender.
The Court held that under Israeli law a receiver in bankruptcy can cancel grants made in the two years prior to the entry into bankruptcy proceedings (in some cases grants may be canceled up to 10 years after made) unless the grant was to ta bone fide purchaser or holder of the lien and in exchange for due consideration. In this case no consideration was given for the amounts paid and therefore the grant is void.