The Registrar of Execution in the Tel Aviv Chamber, Guy Avgi, instructed in his decision to examine 200 execution cases in which the winner is the Migdal insurance company. According to him, the winner's conduct, which did not realize the security it had for many years, led to an artificial increase in the debt. Migdal was obliged to examine in each of the files it opened at the Execution Office in Tel Aviv the possibility of realizing the collateral.
In addition, the Registrar instructed that the debt to be updated be examined, not for the full amount appearing in the execution files if it had acted in this way within a reasonable period of time.
The decision states that over the course of several years, files of Migdal Insurance Company Ltd. came before the Registrar as winners, most of them by virtue of a loan agreement between it and various debtors. To repay the loan, security was set in the form of pension funds held by it. In the framework of those cases, the question was discussed as to why Migdal did not act to realize the collateral close to the breach of the loan agreement according to law, and instead waited for many years while the debt was inflated by large amounts, including doubling and tripling.
The Registrar held that in all those cases, Migdal is a "secured creditor" by virtue of the provision of a loan agreement, and that according to it, it has the right to realize the collateral upon its breach. Failure to realize the collateral means bad faith, which is expressed in an artificial increase in the debt tens of times. It was further determined that this conduct is tainted by bad faith, and unnecessarily harms not only the debtor, but also perhaps the public as a whole. When that debtor reaches the "age of heroism," he will be left with significantly lower sums of money for his economy.
All this when, in 2015, the District Court ruled in a criminal proceeding that a reasonable period of time for realizing collateral is about six months, while rejecting all of Migdal's claims in an attempt to explain why it did not act in this manner there.
As part of Migdal's position ahead of the hearing, it was argued that the Registrar of Execution lacked the authority to issue decisions in cases in a lateral manner. Its authority is primarily administrative. The Registrar held that the authority to examine Migdal's files on the issue at hand, i.e., whether the debt in similar cases increased in a seemingly artificial manner, stems from the purpose of the law, which means carrying out quick and efficient collection while providing shelter to debtors from unnecessarily harmful collection procedures, as well as providing a solution for those who cannot afford to pay their debt.
To all these must be added the authority to examine the issue of interest in execution cases, including its reduction in accordance with the law, according to which the Registrar of Execution may, on his own initiative or at the request of the debtor, and after giving the winner an opportunity to argue his claims, reduce, for special reasons to be recorded, the additional interest accrued in the execution file."
Photo: Israel Police Spokesperson's Office,
In conclusion, the Registrar determined that he has the authority to examine all the winner's files by virtue of loan agreements, and to determine with respect to each and every one of them whether an interest rate reduction should be ordered during a period of inaction, or during the period in which Migdal chose not to realize the collateral while significantly increasing the debt. That is, examining the issue of "last resort". "In every case, the parties must be given the right to plea, and its individual circumstances will also be examined. Then, a decision will be made regarding the realization of the collateral, and the amount to be realized, accordingly."
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