The Supreme Court this week issued a temporary injunction to delay interim financing for
Feuchtwanger Industries (TASE:
), at the behest of businessman David Haby.
The interim financing agreement had been approved by Tel Aviv District Court.
The stay is effective until the court rules on a request for a permanent injunction.
The injunction was granted at the request of David Haby, a board member of the company and of Mashav Refrigeration Industries (TASE:MASH). He is also a shareholder in Mashav, which holds a stake in Feuchtwanger.
The court asked Feuchtwanger's administrator, creditor banks, and companies interested in bidding for the company, to respond within ten days.
Haby's petition argued that he has filed appeals with the Supreme Court against two District Court rulings - the approval in principle for Feuchtwanger's interim financing, and the rejection of Haby's request to be a party to rehabilitating the company. Haby's appeal seeks to reverse both rulings.
The approved plan includes a NIS 20 million infusion from the banks and another NIS 20 million from an external investor. The investor will get an option to take over the company at a price to be agreed with the administrator and approved by the court.
Haby says if the plan is not delayed by the court, then he could eventually find himself in the position of having won his court appeals but facing an already-sold company controlled by a third party.
Haby also claims that implementing the plan could lead to his own financial ruin. He says the plan could lead to the sale of Mashav's key asset, the Feuchtwanger stake. Lack of caution in exercising the stake, which Haby said the District Court approved, could seal Mashav's fate.
A collapse of Mashav, already under a stay of liquidation, would bring down his own company, which owns the Mashav shares, and for which Haby has made personal guarantees of NIS 28 million to Bank Hapoalim.