The Zisser Family will pay NIS 95 million to Bank Hapoalim (TASE: POLI), of which NIS 45 million will be paid immediately and an additional NIS 50 million within one year. This was agreed in the settlement between Hapoalim and the estate of the late Motti Zisser, which is being administrated by his son David Zisser and his widow Bracha Zisser. Most of the funds for the settlement are being paid by the partners of the late Zisser’s son, including attorney Phillip Maier.
The settlement was reached as part of proceedings that Hapoalim is conducting against Zisser’s estate in respect of an alleged debt of NIS 1.3 billion, the basis of which is Zisser’s guarantees to several companies he controlled, including Europe-Israel and Merkazei Shlita.
Businessman Motti Zisser died in June 2016 of cancer. Zisser, once considered one of Israel’s most prominent real-estate developers, sunk into dire financial straits in the last years of his life, and following a huge debt settlement was forced to concede control of Elbit Imaging, which held most of his business operations. The proceedings that are currently being conducted against Zisser’s estate in respect of debts to the bank commenced several years ago, when Zisser was still alive.
In June 2015, Hapoalim filed a motion with the court to declare Zisser bankrupt and appoint Adv. Giora Erdinast, who represents the bank, as the receiver of Zisser’s personal assets. The motion was filed after Zisser’s privately owned companies - Europe-Israel and Merkazei Shlita, through which Zisser controlled Elbit Imaging - were placed in receivership and liquidation after defaulting on a debt of over NIS 1 billion to Hapoalim. Last January, Elbit Imaging’s bondholders headed by York Capital, took control of Elbit, in the wake of a settlement that included the write-off of NIS 1.8 billion debt to the bondholders.
Zisser personally guaranteed the debts of Europe-Israel and Merkazei Shlita. After Zisser was unsuccessful in negotiating a settlement, he announced that he had no intention or ability to repay the companies’ debts; According to the bank, this amounted to an act of bankruptcy.
In the proceedings, Tel Aviv District Court president, Judge Eitan Orenstein, determined, among other things, that the large estate that Zisser built in the upscale neighborhood of Bat Ganim, Petah Tikva, would be sold to a group of private buyers for NIS 28 million. Zisser passed away during the proceedings, which continued against his estate.
Last March, Orenstein appointed Adv. Erdinast, Hapoalim's counsel, in an official capacity to locate and preserve any assets of Zisser’s estate that would be discovered, and ruled that the bank must file a claim against the estate to recover the debt, which would be heard separately, and not under the bankruptcy proceeding.
Orenstein subsequently dismissed Hapoalim's motion to declare Zisser’s estate bankrupt, thus supporting the position of Zisser’s widow, Dr. Bracha Zisser, that there are grounds to question the validity of the guarantee that the late Motti Zisser signed. Through her attorneys Dr. Avi Weinroth, Ariel Dinovitzky, and Arik Magidish, Dr. Zisser, alleged that Hapoalim destroyed assets that could have been used to repay the debt, including Zisser’s management agreement with Elbit, and the bank also acted out of self-interest, and therefore the guarantee was invalid. Hapoalim filed an appeal against this decision.
Furthermore, through its attorneys Giora Erdinast and Adv. Tomer Weissman, the bank recently submitted information about the family’s assets to the Tel Aviv District Court, which had been collected by the well-known business intelligence firm Black Cube, owned by Dan Zorella and Dr. Avi Yanus. The bank was granted a preliminary injunction that applies an effective freeze on all the companies of the Zisser Family and their business partners.
As revealed several months ago, Black Cube was hired by the bank to locate Zisser’s assets around the world, and among other things located a chain of hotels in Brussels; an entire hotel-mall complex in Amsterdam; a chain of rental apartments in Strasbourg, France; and a company in Hong Kong. The companies are headed by Phillip Mayer and other individuals related to David Zisser, but Black Cube’s findings confirm that Motti Zisser himself had controlled these assets and they were in fact owned entirely by him through a sophisticated and complex net of individuals and straw companies.
Prof. Avi Weinroth, Dr. Zisser’s attorney said in response, “The settlement was reached after District Court president, Eitan Orenstein ruled that the late Motti Zisser is not bankrupt. Bracha Zisser contributed no funds to the settlement; the [people involved] are only the partners of Zisser’s son, but she welcomes the agreement, which will lead to the dismissal of the appeal to the Supreme Court against Judge Orenstein’s ruling, and she will be able to live her life in peace and continue the enormous contribution she makes through her public activity.”
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2018
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