Background
Lee Marshall Properties Ltd. held leasehold rights in commercial-industrial real estate at the Mevo’ot Gilboa Industrial Park, where it began constructing a complex containing retail, office, and warehouse space, a gas station, and a convenience store. Bank Hapoalim financed the project and obtained security interests in the property. After construction stopped near completion and arrears accumulated, the Haifa District Court appointed receivers to enforce the bank’s security.
Following a marketing process and court-supervised bidding, Delkal Properties (2015) Ltd. submitted the highest offer—NIS 51,055,000 plus VAT. Although the bid was materially below the appraisal, the District Court approved the sale. It found that the receivers had marketed the unusual property diligently, the bids received clustered around the same price, no better concrete offer existed, and both the first- and second-ranking secured creditors supported the transaction despite being unlikely to recover their claims fully. Lee Marshall appealed and sought a stay, arguing that completing the sale would irreversibly transfer its principal asset at tens of millions of shekels below its true value.
The Court’s Holding
Justice Daphne Barak-Erez denied the stay application and dissolved the temporary stay. Under Civil Procedure Regulation 145(a), filing an appeal does not itself stay the challenged decision; the applicant must demonstrate both strong appellate prospects and a favorable balance of convenience, with the latter receiving greater weight. Given the District Court’s detailed ruling after a lengthy sale process, the Supreme Court said Lee Marshall faced a substantial obstacle on the merits of its appeal.
More importantly, the balance of convenience clearly favored allowing the sale to proceed. Delay would continue imposing costs on the receivership estate, while Delkal’s bank guarantee—and therefore the offer itself—was due to expire in September 2026, with no alternative purchaser available. The secured creditors’ willingness to accept a sale price below the debt owed to them reinforced the commercial urgency of completing the transaction. The Court also removed Nadav B. Logistics Ltd. from the proceeding because it had withdrawn from the bidding and disclaimed any further interest. Lee Marshall was ordered to pay NIS 5,000 jointly to respondents 1–4 and NIS 5,000 to Delkal.
Key Takeaways
- An appeal does not automatically stay a receivership sale; the appellant must establish favorable appellate prospects and, especially, a favorable balance of convenience.
- A sale below appraised value may proceed when diligent marketing produces similarly priced bids, no better concrete offer exists, and secured creditors support the transaction despite incomplete recovery.
- The risk that a time-limited offer will lapse, combined with continuing receivership costs and the absence of another buyer, can outweigh the difficulty of reversing a completed property transfer.
Why It Matters
The decision emphasizes the Supreme Court’s reluctance, at the interim-relief stage, to disrupt a thoroughly supervised receivership sale based solely on a gap between the winning bid and an appraisal. Courts may treat actual market responses, creditor incentives, carrying costs, and the risk of losing the only viable offer as more probative of immediate commercial reality.
The ruling did not decide the merits of Lee Marshall’s appeal. It determined only that the company had not justified suspending the sale while that appeal remained pending.