Background
The Mateh Yehuda Regional Council sought an order commencing insolvency proceedings against M. Mastix Ltd. after allegedly failing to collect NIS 1,270,239 in municipal property taxes. Following unsuccessful settlement discussions, the Jerusalem District Court issued the commencement order on July 5, 2026, and appointed Adv. Alon Rihani as trustee. The District Court addressed the company’s arguments concerning limitations, delay, the statutory presumption of insolvency, the disputed nature and amount of the debt, and the appropriate forum.
About a month later, the trustee sought an order requiring Menashe Shraga—the company’s director and chief executive, and a former shareholder—and another company to return approximately NIS 4.89 million allegedly removed unlawfully from the insolvency estate. The District Court granted ex parte attachments over property, vehicles, funds, and shares. Shraga then challenged the attachments in the insolvency court while separately appealing the commencement order and asking the Supreme Court, on an ex parte basis, to stay the District Court’s decision, freeze the trustee’s powers, and cancel the attachments.
The Court’s Holding
Justice Khaled Kabub denied both the stay application and the request for an interim order. An appeal does not itself suspend the challenged decision; interim relief pending appeal requires both good prospects of success and a balance of convenience favoring the applicant, with particular weight generally given to the balance of convenience.
Although Shraga’s appeal formally challenged the commencement order, most of his requested relief concerned the later attachment order. The Supreme Court held that those objections should first be resolved in the pending insolvency proceeding, where the District Court had expressly allowed Shraga to seek cancellation or narrowing of the attachments and had already requested the trustee’s response. As to the commencement order, Shraga did not explain his present connection to the company or show how the order harmed his rights, and his delay of more than six weeks undermined the claimed urgency.
The Court also found that Shraga’s assertions concerning the disputed debt and the merits of the appeal lacked adequate support at this stage. Because the District Court had comprehensively considered the parties’ arguments and left some debt-related issues for continued examination in the insolvency proceeding, Shraga faced a substantial hurdle on appeal. The ruling did not prejudge his challenges to the attachments, including the apparent disparity between their amount and the debt underlying the insolvency case. No costs were awarded because no response had been requested.
Key Takeaways
- A party seeking interim relief pending appeal must show both favorable prospects on appeal and a balance of convenience supporting relief; filing an appeal alone does not stay the challenged ruling.
- Objections to ex parte attachments issued within an insolvency case ordinarily should first be presented to the insolvency court, particularly when a motion to cancel or narrow those attachments remains pending there.
- Delay, unsupported merits arguments, and failure to explain personal harm can defeat a request to stay an insolvency commencement order.
Why It Matters
The decision underscores the Supreme Court’s reluctance to intervene in ongoing insolvency administration when the trial court is already considering targeted challenges to provisional measures. An appellant cannot use a stay request directed nominally at an insolvency commencement order as a substitute for litigating attachment objections before the court that issued them.
At the same time, the Court preserved Shraga’s ability to challenge the attachments and signaled that the insolvency court should examine whether their scope is proportionate, given the facially significant gap between the attached amount and the municipal-tax debt underlying the proceeding.