State receiver: Better Place must be liquidated

"There is no choice but to appoint a temporary liquidator" for former embodiment of Israeli green innovation.

May 27, 2013 21:23
3 minute read.
Better place car charging

Better place 311. (photo credit: Better place)

In its first official response to electric car innovator Better Place’s petition to appoint a liquidator, the state receiver told the Lod District Court on Monday that “there is no choice but to appoint a temporary liquidator” to handle the four subsidiaries that make up the company.

The receiver, who is the official custodian of the state’s property and assets, added that the appointment of a temporary liquidator for Better Place – the company that once embodied Israeli green innovation – was necessary “in order to provide an urgent administrative and legal response to the companies’ employees, customers, suppliers and creditors.”

The Knesset Economics Committee said it would hold a special hearing next week to discuss the various aspects of the company’s closure, particularly the effect on Better Place customers.

The committee’s chairman, Labor MK Avishai Braverman, spoke with Better Place CEO Dan Cohen on Monday about the situation left in the wake of the company’s bankruptcy filings.

Unlike some other recently bankrupt companies, Better Place did not ask for the court to stay related court proceedings so that it could continue operating, though it did request an order to appoint accountant Yoav Kfir as its temporary liquidator.

Who the temporary liquidator is can heavily impact how harshly a company’s missteps are investigated for possible fraud, and many companies campaign to have a more “friendly” candidate investigating them. Depending on the case, the temporary liquidator can also become permanent.

In its response, filed by attorney Uri Wahlerstein, the state receiver disputed Better Place’s request to appoint Kfir as temporary liquidator.

The response said that “without denigrating his strong capabilities, which are acceptable to the receiver, his appointment to the job was proposed by the companies, whose conduct has to be examined in the proceedings.”

Therefore, the state receiver said that the court should “consider neutral candidates to the position of temporary liquidator” as an alternative, or in addition to Better Place’s suggested candidate.

A list of alternate experts was also included in the response, such as accountant Gabi Trabelsi, attorney and accountant Sigal Rechav-Rozen, attorney Alona Baumgarten, accountant Chaim Kimmel and attorney Elad Afari.

Renault SA, the maker of the Fluence ZE electric car for Better Place, said that it was not notified about the closing of the company and is demanding 65 million euros as a secured creditor. It has filed a motion with the court to join the liquidation proceedings and for the court to order Better Place to hand over all court documents, according to Globes.

The four Better Place subsidiaries filed their petition on Sunday after they became insolvent.

The petition states that they owe external suppliers $40m., that the value of their assets is $9.5m. and that its cumulative loss was $812m., a Globes report said.

“Despite significant efforts,” the firm announced, “revenues are still insufficient to cover operating costs, and in the light of the continued negative cash flow position, the board has decided that it has no option but to seek to make this application to the courts for an orderly liquidation of the company.”

“This is a difficult day for all of us,” said Better Place’s CEO, adding that despite its innovative vision and accomplishments, the latest unsuccessful round of fund-raising left the company financially unviable.

“Unfortunately, after a year’s commercial operation, it was clear to us that despite many satisfied customers, the wider public take-up would not be sufficient and that the support from the car producers was not forthcoming,” he said.

The announcement spelled uncertainty for Better Place car owners, who bet on the company’s continued operation to provide electric infrastructure for their cars. Without battery-switching stations, the cars will be limited to about 120 kilometers before needing to be plugged in.

It will be up to the courts and the liquidation team to determine how to compensate them, a task complicated by the fact that some purchased four years’ worth of kilometers for their car batteries ahead of time, while others bought them on a pay-as-you-go basis. Similarly, some purchased their cars, while others had them on lease.

Founded by former SAP executive Shai Agassi in 2007, Better Place captured global attention with its vision for making electric cars viable by building a battery-swapping infrastructure to rival standard gas stations.

It had plans to launch in Australia, Japan, China, Europe and the US.

Niv Elis contributed to this story.

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