[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN ISRAEL] 42
apartment allows a person to repay his debts in full by selling it and leaves him with a sufficient amount to purchase another residential property or pay rent, then there is no point in going into insolvency proceedings, which endanger the debtor in losing the property. In cases where the value of the property is not significantly higher than the amount of its debts listed in the debtor's execution, and he chooses to go into insolvency proceedings, it is important to know that the court is not necessarily in a hurry to put any residential apartment up for sale, preferring to exhaust all other alternatives. There is still the possibility of receiving the protection of the debtor's residential apartment in certain circumstances. Order of Repayment Under Israeli law, the order of repayment in
1. Receipt of assistance from a corporate rehabilitation specialist 2. Negotiations for debt settlement 3. Commencement of insolvency proceedings 4. Additional measures may be derived from existing case law and practice, such as in cases of distressed companies, the officers of the corporate are required to act in favor of the corporate creditors, and to take all precautionary measures for that purpose.
insolvency proceedings is as follows: 1. Creditors secured by a fixed charge 2. Expenses of insolvency proceedings 3. Preferred creditors 4. Creditors with a floating charge 5. Ordinary creditors 6. Deferred creditors and shareholders Directors’ and CEO’s liabilities
The Law allows the court to impose personal liability on a director or general manager that knew, or ought to have known, that the corporate entity was insolvent and did not take reasonable steps to reduce the potential impact of insolvency. However, the Law creates a presumption that a director or general manager took reasonable steps to reduce the extent of the insolvency, if measures were taken to evaluate the economic position of the corporation and acted to ensure that the corporation take one of the following measures:
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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