Israeli Supreme Court Upholds Jail Sentence for 70-Year-Old Debtor

Supreme Court Justice Ruth Ronen has rejected a plea from 70-year-old bankrupt Rafael Rubinetz to appeal a bankruptcy court's decision to imprison him for failing to comply with court orders. Rubinetz, whose primary debt amounts to 2.2 million shekels, is scheduled to begin a prison sentence on October 28. This marks at least his third arrest in 11 years of bankruptcy proceedings.

An arrest warrant was issued in August by Judge Gilad Lubinsky-Ziv after Rubinetz stopped making a monthly payment of 2,500 shekels, agreed upon in November 2024. By May, his arrears had reached 35,000 shekels. The judge stated that Rubinetz was attempting to link his obligations to the approval of a proposed settlement, which creditors had rejected. Lubinsky-Ziv described Rubinetz's behavior as egregious and noted that terminating the proceedings was not an option, as they were initiated by a creditor and funds from his wife's bankruptcy were expected.

Rubinetz was initially sentenced to ten days in Hadarim prison starting October 14, but the sentence was postponed to October 28 due to the appeal. Justice Ronen found no grounds to overturn the lower court's decision, citing Rubinetz's consistent indication that he would only pay under a settlement that would end the proceedings. She noted his claims of financial inability to pay were unsubstantiated, as he failed to provide affidavits, evidence of changed circumstances, or mandatory reports.

The judge stated Rubinetz has been failing to meet his obligations for about 18 months without satisfactory explanation, despite numerous opportunities. Rubinetz, a dual Israeli-American citizen, previously sold real estate in the U.S. before 2014, attracting investors for AG Homes, and served ten months in federal prison for related offenses. His family lived in a villa in Savyon from 2012-2017, paying $6,000 monthly, before being evicted. In March 2015, he sold a plot of land for 600,000 shekels but failed to report the transaction, claiming he forgot. In 2016, the couple purchased vehicles worth 250,000 shekels. Rubinetz was ordered to pay 2,000 shekels monthly in November 2015. In 2018, he proposed settling debts with funds from "distant relatives" while requesting a reduction in monthly payments to 100 shekels, which was denied. He was arrested for ten days in July 2018 at the request of his estate manager's lawyer, Gila Hachmon. Subsequent arrest orders were issued in March 2022 (14 days) and renewed in September 2023 and July 2024, with the latter being canceled after he paid his arrears.