Handling Processes and Investigations within the Framework of the Liquidation of the Matok Group
- During 1999, a stay of proceedings order was granted against the Matok Group, one of the largest wholesalers (at that time) in the Israeli food sector. Mr. Gabi Trabelsi, CPA was appointed trustee for the Group, while our office handled the entire legal aspect of this process. Approximately ten days after the trustee’s appointment, enormous deficiencies totaling in excess of NIS 100 million were discovered in the assets, primarily with regard to inventories and trade debtors, which the Group’s owners had reported. Consequently, the trustee notified the Court of his resignation in light of the huge discrepancy between the data reported and the actual situation. The Court granted liquidation orders against the Group companies and appointed Zvi Yochman, CPA as temporary liquidator. Our office continued to represent the temporary liquidator in attending to the legal aspect of the complex processes that the aforementioned liquidation involved.
- Within the framework of the Matok case, the Group’s liquidator, Zvi Yochman, CPA, through our office, filed a claim against the company, Efiben Developments Ltd. This claim sought to lift the screen of Efiben’s incorporation, to allocate its assets to the Matok Group and to appoint CPA Yochman as the receiver of its assets. The basis for this claim is the transfer to Efiben of the rights of the Matok Group in three warehouses on Kibbutz Hulda a short time before the collapse of the Matok Group. The founders of Efiben are the controlling shareholders of the Matok Group, but on the date that the claim was submitted its shares were registered in the names of the daughters of Menashe Matok. It is alleged in the claim that Efiben was an integral part of the Matok Group, that it acted in the service of the Matok Group’s interests, and that making illegitimate use of it harmeds the interests of the Matok Group’s secured creditors.
In July 2007, the Tel-Aviv District Court accepted the claim in its entirety and
ruled that the Matok Group and Efibens are to be treated as one entity, after
lifting the screen of incorporation from both of these.
- It should be noted that one of the companies in the Matok Group is the public company, Arzan International (currently in liquidation), which was listed on the Nasdaq in the U.S.A. The processes with regard to this company had to be dealt with from the aspect of the U.S. authorities too, and, within this context, a review was performed of the representations made by the company to investors and authorities in the U.S.A.
- Within the framework of this case, the Court appointed an expert investigator whose task was to trace how the various parties had managed to fabricate representations showing that the company’s assets were worth in excess of NIS 100 million, while in fact they assets were actually only really worth a few million shekels. Our office provided assistance in the long investigation process, which extended to a number of different countries. Upon its completion a (secret) report was presented, which formed the basis for the instigation of subsequent legal proceedings (and alternatively, the negotiations that took place prior to commencing proceedings) against various parties, who had provided services to the Group, as well as against the directors.