Reuters: Bankruptcy News: Court appoints observers to monitor Israel's IDB in debt battle

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Court appoints observers to monitor Israel's IDB in debt battle Apr 30th 2013, 15:22 TEL AVIV, April 30 | Tue Apr 30, 2013 11:22am EDT TEL AVIV, April 30 (Reuters) - Nochi Dankner, the chairman of debt-ridden Israeli conglomerate IDB Holding Corp, won a key battle in a fight with bondholders, with a Tel Aviv court allowing Dankner to keep control of the company albeit with outside supervision. Many of the companies IDB owns have been hard hit by a combination of slowing economic growth and increased competition. IDB Development, a unit of IDB Holding Corp , owes nearly 6 billion shekels ($1.7 billion) in total debt and its bondholders have charged that the company should be declared insolvent and cannot pay its debts. As a result, IDB Development bondholders had asked the court to hand them control of the company as part of a debt settlement plan. On Tuesday, judge Eitan Orenstein allowed Dankner to remain in control but appointed two observers to monitor IDB's conduct. "At the end of the day, the judge gave the company the ability to continue to operate as it is, with its management and board and to continue to pay its obligations," Dankner told reporters after the ruling. "The company has more than 1.1 billion shekels in its coffers, which is a large sum and enough to make payments for a year, he said adding that the company has assets worth billions of shekels that it can use. Danker added that the appointment of two monitors does not override the powers of IDB's management. Earlier this week, Argentinian businessman Eduardo Elsztain agreed to invest another $75 million in IDB Holding and IDB parent company Ganden Investments. The deal is conditioned upon reaching a final debt settlement with bondholders. IDB Holding last month reached a settlement in principle with representatives of its bondholders and the company said any changes could lead to the deal with Elsztain being cancelled. Bank Leumi last week terminated a 150 million shekel debt forgiveness deal with Ganden. The IDB group, which has assets of $30 billion, controls Cellcom, Israel's leading mobile phone operator, supermarket chain Super-Sol and Clal Insurance . Its subsidiary Koor Industries owns a 2.4 percent stake in Credit Suisse. (Reporting by Steven Scheer) Link this Share this Digg this Email Reprints

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