Client Update
The Insolvency and Rehabilitation Law, 2018
On March 5, 2018 the Israeli parliament passed the Insolvency and Rehabilitation Law, 2018 (the "Law"). The Law establishes, for the first time, a modern and consolidated set of insolvency laws for individuals and corporations in Israel. In addition to the codification and consolidation of existing insolvency and rehabilitation rules from multiple sources, the Law makes a number of changes to these existing rules in Israel.
Set out below are some of the key elements of this important new Law.
The Knesset has aimed to update the law on insolvency by passing the Law of Insolvency and Economic Rehabilitation.
This has arisen as a result of the current insolvency laws being considered to be regulated under outdated legislation, being disorganised and having had a detrimental effect on debtors, creditors, and the economy. The incoming Law will take effect in 18 months' time and is designed to rectify the situation and provide the Israeli economy with modern legislation with respect to insolvency.
The Law has three primary objectives:
According to a ruling handed down recently by the Israeli Supreme Court, when a real estate asset is sold before the seller enters bankruptcy proceedings, and the seller has not paid the betterment tax, the local council is not obligated to grant the buyer approval for registering the property under his name. Thus, the buyer will be required to pay the betterment tax.
In March 2018, the Knesset enacted the Insolvency and Economic Rehabilitation Law, 5778 – 2018, which is designed to update the insolvency laws that today apply in Israel.
Until now, insolvency laws were regulated under old-fashioned, outdated, and spotty legislation that was detrimental to the debtors, the creditors, and the entire economy. The law approved in 2018 is designed to rectify this situation and provide the Israeli economy with modern insolvency legislation.
Summary
Our experience working on restructurings across Europe and Asia has given us an appreciation for the value of preparedness. Businesses encountering financial difficulties — whether arising from turbulent financial markets, an unforeseen crisis, increasing or burdensome regulation or competitive pressure — often find their survival may depend on how well prepared they were for the unique pressures a restructuring event brings.
In addition to the new legal concepts introduced by Amendment 19, several recent high-profile bankruptcy cases have indicated that Israeli insolvency law generally is in a state of transition.
BNP Paribas – IDB Development Company
26 November 2013
[2013] EWHC 3689 (Comm)
Commercial Court, Queen's Bench Division (Burton J)
Foreign insolvency proceedings do not override arbitration agreements
The trustee of a large bankruptcy in Israel commenced proceedings in the Israeli insolvency court against Dr Bannai to recover assets (worth $150m) said to be due to the bankrupt under a 2002 agreement. The 2002 agreement was governed by English law and contained a London arbitration clause which it was accepted covered the claims in question.
The Rescheduling of Indebtedness of Large Israeli Companies
2013 was the year when repayment obligations finally caught up with some of Israel’s largest corporate borrowers.
A GLOBAL LEGAL MEDIA & NISHLIS LEGAL MARKETING PUBLICATION THE US-ISRAEL LEGAL REVIEW 2022 IN ASSOCIATION WITH: Israel’s Unicorn Success Story SNNOVATION The US-Israel Legal Review 2022 1 Contents THE US-ISRAEL LEGAL REVIEW 2022 2 WELCOME FROM THE PUBLISHERS Global Legal Media and Nishlis Legal Marketing 4 ECONOMIC HEADWINDS, A HOT WAR AND A TRADE WAR: THE IMPACT ON ISRAEL’S COMPANIES With rising interest rates, rising inflation and reduced growth forecasts, how has that reality been faced by corporate clients and start-ups? Arnon, Tadmor-Levy provide some answers.
UPDATED 3 AUGUST 2020
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Updated: Ireland, Israel
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