Courts have held that the Bankruptcy Code's avoidance powers do not apply extraterritorially, SIPC v. Bernard L Madoff Inv. Sec. LLC ("Madoff"),480 B.R. 501 (Bankr. S.D. N.Y. 2012); Barclay v. Swiss Fin. Corp Ltd., 347 B.R. 708 (Bankr. C.D. Cal. 2006); Societe Generale plc v. Maxwell Commc'n Corp plc "Maxwell I"),186 B.R. 807 (S.D.N.Y. 1995) and others have found to the contrary, Weisfelner v. Blavatnik (In re Lyondell),543 B.R. 127 (Bankr. S.D.N.Y. 2016); Sec. Investor Prot. Corp. v. BLMIS (In re BLMIS) , 513 B.R. (S.D.N.Y.
Insolvency proceedings are an integral part of business-commercial activities, in circumstances whereby a person or corporation might need to institute proceedings to rehabilitate its business activities or even to liquidate the company.
Insolvency reflects a factual situation in which a debtor (person or corporation) encounters economic and cash flow difficulties to the extent that the debtor is incapable of paying its debts to creditors on time.
Over the past few years, there has been an increase in corporate entities in Israel facing a financial crisis leading them either into liquidation or forcing them into a recovery process. Israeli law provides various tools with which to handle such situations. This article provides an outline of the key principles of insolvency proceedings in Israel, the legal tools available to Israeli corporations in financial crisis, creditor rights in such proceedings, and the legislative changes expected in this area. By Yuval Bargil, partner and Gil Oren, partner at Yigal Arnon & Co.
Recently, the Knesset has passed the Law of Insolvency and Economic Rehabilitation – which is aimed at updating the law on insolvency currently in effect in Israel.
The insolvency laws as they stand today are regulated under archaic legislation, in addition to being outdated and disorganized. This has been detrimental for debtors, creditors, and the entire economy alike. The new Law is designed to rectify the situation and provide the Israeli economy with modern legislation with respect to insolvency.
The Law has three primary objectives:
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
Updates marked with *
Updated: Ireland, Israel
We take a look at some of the recent emergency legislation and measures implemented by various nations around the world in response to COVID-19. As this is a rapidly developing crisis, please ensure you keep a close eye on the Lexology Coronavirus hub page for the most up-to-date information.