Mikhail Chernoy yesterday petitioned the Tel Aviv District Court to receive the surplus from the sale of Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) shares formerly held by Gad Zeevi. The shares were sold by the receiver on behalf of the banks, which seized the shares when Zeevi could not repay the loans he took from the banks to buy the shares.
Chernoy filed the claim as part of a "request for instructions" in the bankruptcy process being heard by Judge Varda Alshech.
Chernoy claims that since the receiver sold the Bezeq shares and Zeevis' debts to the banks are repaid, the balance of the sale proceeds should be deposited in Chernoy's bank account, which was used for the $160 million in bank guarantees, which the banks foreclosed in 2001 as part of the repayment of Zeevi's debts.
Chernoy claims that to secure the $643 million loan given by the bank syndicate to Zeevi in 1999 to buy the Bezeq shares, he provided Zeevi $143 million in bank guarantees. When Zeevi defaulted in 2001, the banks foreclosed the bank guarantees as part of the debt repayment, to the tune of $160 million, including interest. The Tel Aviv District Court appointed Adv. Alex Hartman as receiver of Zeevi's Bezeq shares for the purpose of enforcing the balance of Zeevi's debts to the banks.
Hartman sold 5.85% of Bezeq in August. Following the rise in Bezeq's share price, Chernoy said that Hartman should sell the remaining shares, which would result in a surplus beyond the amount owed to the bank syndicate: Bank Hapoalim (TASE: POLI), Bank Leumi (TASE: LUMI), Israel Discount Bank (TASE: DSCT) and its subsidiary Mercantile Discount Bank, Mizrahi Tefahot Bank (TASE:MZTF), First International Bank of Israel (TASE: FTIN1;FTIN5), and Union Bank of Israel (TASE: UNON).
Chernoy said that in light of the possible surplus, any remaining funds from the sale of the shares should be returned to the Swiss bank account on whose basis of the bank guarantees were issued, rather than Zeevi's companies.
Published by Globes [online], Israel business news - www.globes-online.com - on September 30, 2009
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