The Insolvency Commissioner informed the District Court in Tel Aviv that he believes that the convening of the regular creditors’ meetings should not be delayed until the next day (Thursday), for the purpose of voting on the sale of Convexom, a cyber defense company from the NSO Group to a company controlled by the NOAL SCSP fund, which is the controlling owner of Convexom and The controlling owner of NSO and in conflict with its management. NSO claims that this is a conflict of interest.
The representative of the Commissioner for Insolvency and Economic Rehabilitation, Adv. Dikla Gal Stav, stated as part of her response to Judge Hagai Brenner that Convexum’s trustee, Adv. Uri Gaon, believes that NSO’s request should be rejected. “According to the trustee, the real purpose of the request is to thwart the approval of the plan for economic rehabilitation that the trustee and his team worked for a long time to formulate. NSO will be able to raise questions and request relevant information within the framework of the meetings themselves. Both the fund and NSO may have a conflict of interest in the vote, since they have control over the company and stand on both sides of the fence in the long-standing dispute between them. In this state of affairs, the commissioner believes that it is not possible to hold both ends of the stick and to the extent that it is determined that the fund is in a conflict of interest, this also implies that the applicant (NSO – L.D.) is in a conflict of interest in voting on the settlement proposal.”
At the beginning of this month, Gaon informed the District Court in Tel Aviv that after the company’s operation and rehabilitation, he was able to receive an offer to purchase all Convexom shares for a total consideration of approximately 30 million dollars from a foreign Luxembourg corporation, which is fully controlled by the NOAL SCSP fund, which is the controlling shareholder of the Convexom company The trustee stated before the court that “the process of separation from the NSO group has been completed”, while strongly criticizing the conduct of the NSO group.
Attorney Gaon from the office of B. Levinbok & Co. and his representative, Attorney Yaniv Azran, asked the court to order the convening of the company’s creditors’ meetings in order to bring before them and for their approval the economic rehabilitation plan proposed by them, which was formulated on the basis of the agreement to purchase all Convexum shares Recently the NSO group represented by attorney Raanan Kleer submitted an objection to the manner of convening the meetings.
The NSO group requested to instruct the trustee to provide the group and all creditors with full information on the flow of Convexum for the next two months and to state that until this information is provided, the creditors’ meeting will not be convened. NSO claimed that the fund (whose company under its control is supposed to purchase Convexum) cannot participate and vote in the creditors’ meetings that will discuss the settlement. This is because the fund claimed that it is a creditor of Convexcom for a substantial amount of 10 million dollars and also offers to purchase it, therefore there is a so-called conflict of interest. Under these circumstances, it is argued, it is understood that the fund cannot participate in the creditors’ meeting that will decide whether to accept the fund’s proposal. NSO also claimed that the company’s creditors do not have enough information to make an informed decision whether to vote in favor of the fund’s proposal. At this stage, a court decision has not yet been issued.
The trustee and NSO chose not to comment.