When a lawyer asks for less: the chairman of the liquidation committee tries to reduce the lawyers' fees (5.2013)

Adv. Avihai Vardi demanded from the court that the realization of a debtor's villa in a case where he is acting as a collector be carried out through the collection, and not through the execution.

The reasoning: realization in this way will save all creditors NIS 700,000 in fees

Adv. Avihai Vardi, Chairman of the Liquidation Committee in the Tel Aviv District of the Bar Association, who serves as the debtor's receiver,

asked the court to order that the procedure for the realization of the debtor's main asset, a villa in Sabion, be carried out by himself as part of the receivership case and not through

a receiver on behalf of the secured creditor, who asked to sell the property through execution.

The reason for Adv. Verdi's request is the disparity in fees. According to him, even though it is the exact same work, the fees through execution will be NIS 700,000 higher, which will be deducted from the creditors' fund.

Adv. Verdi filed the request as part of a receivership case pending in the Central District Court before Judge Irit Weinberg-Otowitz. The debtor, Yitzhak Kobi, the owner of the company Haserem Generators,

fell into debt following personal guarantees he gave to secure the company's debts.

In January, Kobi's creditor, Tal Kakun, went to court and demanded the appointment of a receiver. The debtor agreed and the judge appointed Verdi as temporary collector.

The total amount of the debtor's alleged debts is tens of millions of shekels, and the main asset at the disposal of the creditors is a villa in Sabion that the debtor purchased in July 2009 from the businessman Ofer Nimrodi.

The property was purchased through a NIS 9 million mortgage granted by Clal to Kobe. The current mortgage debt is NIS 8 million. An appraisal conducted a year ago valued the villa at NIS 18.3 million.

According to Verdi, the realization of the villa should be done under the supervision of the court and not in an individual procedure that is all intended to serve one creditor,

because even after the mortgage is paid off there should be significant amounts left that will benefit all the creditors.

In response, Clal filed through the receiver on his behalf, attorney Gil Dan, an objection to the sale of the villa as part of the bankruptcy case. Clal claimed that a case had already been opened for execution in January 2012 and that the "Gerbash Rule"

, a 2000 ruling by Judge Varda Alsheich, defined the right of a secured creditor to continue with enforcement procedures in an enforcement case and subject to the court's supervision of the bankruptcy case.

Vardi, on the other hand, presented Elsheich's ruling in the case of CPA Aryeh Chen v. Ulmi David, in which it was determined that: "Practice has taught that a secured creditor often tends.

.. to realize the property as quickly as possible, even if at an unreasonable price that seriously harms the interest of the unsecured creditors".

A few weeks ago, a hearing was held on the request, in which Attorney Verdi addressed the issue of fees for the first time and stated that according to his calculation,

the difference in the implementation process between the executor and the court in terms of fees is NIS 700,000.

According to the enforcement regulations, the fee for the person in charge is up to 8% of the value of the property plus VAT, so if the villa is sold for NIS 18 million, the fee will be NIS 1.26 million.

If the procedure were to be carried out through the court,

The salary will be determined according to the company regulations (rules regarding the appointment of joint collectors and their salary) and will be 468 thousand shekels including VAT.


Adv. Vardi said at the hearing that "if they even say that they are paying the difference, let them go for what they want. We, the ordinary creditors, are not ready to give anyone money for free."

Verdi claimed that the sale procedure is the same except for the difference in fees. "I don't care if Attorney Dan realizes," said Verdi, "but I cannot give up NIS 700,000 for the benefit of the creditors."

Later it was agreed that Attorney Dan would be appointed receiver and carry out the sale through the court and his salary would be determined according to the liquidation regulations, that is, a lower amount than he could have received in the Hotzlap. The judge approved the agreement.

Attorney Dan responded: "It was decided that I will realize the property in my district. I stopped the procedure at the hospital and will work to implement it as stipulated."