Background
Ilan Sasson, the controlling shareholder of Rom Kinneret Assets and Investments Ltd., sought leave to appeal a Tel Aviv-Jaffa District Court ruling (Justice N. Grossman, December 7, 2025) that consolidated two separate insolvency proceedings. Insolvency proceedings against the company had been opened on August 27, 2023 (District Court case חדל”ת 44036-08-23), with Adv. Ehud Gindes and Adv. Shai Miloa appointed as co-trustees. More than two years later, on October 31, 2025, the principal creditor — Bank Mizrahi Tefahot — filed a petition in the Tel Aviv Magistrate Court to open insolvency proceedings against Sasson personally (case חדל”ת 67160-10-25).
Before that petition against Sasson could be heard, the company’s trustees filed a motion on November 9, 2025 to consolidate the two proceedings, citing the close nexus between Sasson’s personal debts and those of the company he controlled. The bank did not oppose the motion; the Official Receiver for Insolvency and Economic Rehabilitation Proceedings affirmatively joined it. Sasson objected. The District Court nonetheless granted the consolidation, and on January 13, 2026 issued an order formally opening insolvency proceedings against Sasson personally. Sasson then petitioned the Supreme Court for leave to appeal.
Sasson raised five grounds: (1) the court lacked jurisdiction under Section 280 of the Insolvency and Economic Rehabilitation Law, 5778-2018 to consolidate before an opening order had been issued against him; (2) case law requires a temporal nexus between the two sets of proceedings, which was absent here; (3) the court’s immediate consolidation order exceeded the trustees’ own request; (4) Civil Procedure Regulations 50(3) entitled him to respond to the Official Receiver’s submission and to the court’s December 7 decision before it became final; and (5) the creditor’s underlying petition against him lacked any legitimate business rationale.
The Court’s Holding
Justice David Mintz denied the petition for leave to appeal. He reaffirmed the well-established principle that insolvency courts possess broad discretion by reason of their specialized expertise, intimate familiarity with each stage of the proceeding, and direct impression of the parties, and that an appellate court will intervene only in exceptional cases — a standard that is even more demanding where, as here, the challenged ruling is a procedural case-management decision. The Court found no such exceptional circumstances warranting intervention.
Addressing the merits in the alternative (obiter), the Court rejected all five arguments. On jurisdiction, it held that Section 280 empowers the court to consolidate from the moment a petition for an opening order is filed, not only after the order has been granted. Section 4 of the Law defines “insolvency proceedings” as commencing upon the filing of such a petition, and the closing words of Section 280 — which expressly authorize consolidation even when the petition is filed at the very moment the company’s proceedings are opened — confirm that no prior individual opening order is required. On the temporal-nexus argument, the Court found that Sasson had provided no authority establishing such a threshold requirement, and that the statute’s own language (permitting consolidation even at the moment of the company’s opening) affirmatively shows that any temporal gap between the two proceedings is at most one factor in the overall efficiency analysis, not a barrier. The Court also found no procedural error: Civil Procedure Regulations 50(2)–(3) give the court discretion to determine which submissions require responses; they do not confer on a party an automatic right to reply to a co-respondent’s submission or, still less, to “respond” to a court decision — the proper vehicle for the latter being an appeal, which Sasson had already filed. Finally, the Court declined to reach Sasson’s challenge to the underlying creditor’s petition, noting that the impugned decision concerned consolidation only, and that any challenge to the opening-order decision should have been brought by a separate, timely appellate filing.
No costs were awarded, as no response had been requested from the respondents.
Key Takeaways
- A court presiding over a corporate insolvency may order consolidation with a related individual’s insolvency proceedings as soon as a petition to open proceedings against that individual has been filed — it need not wait for a formal opening order to be issued against the individual.
- There is no categorical requirement that the individual’s and the company’s proceedings be temporally proximate; any gap in timing is merely one factor in the broader efficiency analysis mandated by Section 280, and its absence alone cannot defeat a consolidation motion.
- Civil Procedure Regulations 50(2)–(3) give courts discretion to manage which submissions invite replies; they do not create an absolute right for a party to file a rejoinder to another respondent’s submission or to “challenge” a court ruling through additional briefing — the proper remedy is an appeal.
- Procedural case-management decisions by insolvency courts are subject to an especially deferential standard of appellate review, and a court may craft a procedural timetable that departs from the specific mechanism proposed in the underlying motion.
Why It Matters
This decision settles a previously open question under the Insolvency and Economic Rehabilitation Law, 5778-2018 about when consolidation of corporate and individual proceedings may be ordered. By anchoring the court’s authority in the statutory definition of “insolvency proceedings” — which begins at the filing of a petition, not the issuance of an order — the Supreme Court removes a procedural loophole that controlling shareholders might otherwise exploit to delay consolidation and maintain parallel, potentially inconsistent proceedings before different courts.
The ruling also signals a broadly permissive approach to the use of Section 280 as a tool for achieving procedural efficiency in complex insolvency cases involving intertwined corporate and personal debts. Practitioners advising controlling shareholders or guarantors of insolvent companies should be aware that consolidation can be sought and granted at the earliest stages of proceedings, and that challenges to such orders face a high appellate threshold given the specialized discretion afforded to insolvency courts.