A company requested that the Tel Aviv Stock Exchange not declare it a shell company so that it could sell the stock exchange skeleton to pay its creditors from the sale proceeds, as this would mean reducing trading on the stock exchange and eroding the value of the stock exchange skeleton.
The court accepted the company’s request and ruled that the company should be allowed to sell the stock exchange skeleton. The Tel Aviv Stock Exchange’s regulations state that a company that has no real business activity or a company that has 80% or more of its total assets in funds that do not confer control in accordance with generally accepted accounting rules will be considered a shell company. When a company is defined as such and the conditions required for resuming trading in shares have not been met, its shares are transferred to a preservation list, which means limited trading in shares. Here, although the company meets the definition of a shell company, its inclusion in the preservation list will affect the value of the stock exchange skeleton, which is the company’s only asset. Therefore, despite the rules of the stock exchange’s regulations, it is appropriate to allow the company to sell its stock exchange skeleton, in order to be able to pay its creditors.
