Israeli Supreme Court Approves Mareva Injunction Freezing Foreign Assets of Corporate Officer

The Israeli Supreme Court rejected an appeal against a ruling that issued a general Mareva injunction freezing the foreign assets of a corporate officer, limited to 17 million shekels. The case arose after a district court partially accepted a claim against Serge Boano, chairman of the board of a French company owned by an Israeli beverage import firm, ordering the Mareva injunction to prevent asset dissipation.

The court explained that a Mareva injunction is an exceptional, temporary, and personal remedy designed to prevent a defendant from disposing of assets in a way that could frustrate future judgments. Unlike a general lien on assets, this injunction directly restricts the individual from conducting transactions involving their property. The Supreme Court emphasized the injunction’s rarity and the need for cautious use.

The ruling addressed concerns about the conversion of the defendant’s company from a public to a private entity during ongoing litigation, which could hinder creditors’ ability to enforce claims. The court noted that privatization without timely disclosure raised suspicions of attempts to evade liabilities. It also highlighted the difficulty in identifying foreign assets, justifying the general nature of the injunction in this case.

The dispute originated from minority shareholders of the Israeli company De Home Bar Watch suing the French holding company and its directors, alleging that loans made to the chairman and director (transferred to the companies) were not repaid. The defendants argued these were investments, not loans, with returns tied to profits. The plaintiffs sought the Mareva injunction against all of Boano’s assets due to the privatization move, which they claimed devalued the company and obstructed debt recovery.

The Supreme Court clarified that Boano acted in his capacity as an officer, not personally bound by agreements, and that plaintiffs face significant hurdles proving personal liability. The court also noted that the injunction’s broad scope was justified since the defendant declined to specify his assets when given the chance. Boano’s attorney stated that despite the temporary injunction, the case will proceed in district court where they intend to refute the claims.

Points: - Israeli Supreme Court upheld a Mareva injunction freezing a corporate officer’s foreign assets worth 17 million shekels. - The injunction prevents the defendant from disposing of assets to avoid frustrating future judgments. - The case involves a dispute over alleged unpaid loans versus investments in a French company owned by an Israeli firm. - Privatization of the French company during litigation raised concerns of asset concealment. - The injunction was issued broadly due to difficulties in identifying foreign assets and the defendant’s refusal to disclose them. - The defendant denies wrongdoing and plans to contest the claims in district court.

Topic: security

Entities: {"people":["Serge Boano"],"organizations":["Israeli Supreme Court","De Home Bar Watch"],"places":["Israel","France"]}