El Al to potential buyer: Clarify legal settlement over family’s finances

El Al is perceived as a strategic asset of the State of Israel and under law those who control it must be Israelis.

AUGUST 11, 2020 20:29

El Al plane (photo credit: ERIC GAILLARD/REUTERS) — El Al plane

(photo credit: ERIC GAILLARD/REUTERS)

El Al has requested that potential buyer Eli Rozenberg provide more information about his relations with his father, after the company unveiled a previous lawsuit that it says calls into question the ethics of the family.

Rozenberg, a yeshiva student living in Jerusalem, has made a $75 million bid to obtain a 44.9% controlling stake in the flagship airline.

Specifically, El Al’s lawyer, Avigdor Klagsbald, requested Rozenberg’s lawyer, Adi Zaltzman, provide further information about the relations between the father, Kenny Rozenberg, and son, as well as details concerning the 2018 settlement agreement between the state of New York and Centers Plan for Healthy Living (CPHL), a New York-based nursing home chain owned by Kenny Rozenberg.

CPHL agreed to pay $1.65m. to US authorities after it was alleged it filed false claims to defraud the state.

“El Al is an Israeli asset,” a source close to El Al told The Jerusalem Post on Tuesday. He said the request was made Monday. “We do not wish to have [El Al’s] name associated with such things, if they are true.”

He added that “it is also very obvious that a yeshiva student doesn’t have $75m. and that this is essentially his father’s money.”

El Al is perceived as a strategic asset of the State of Israel and under law those who control it must be Israelis. The younger Rozenberg made aliyah.

Finance Ministry officials have attempted to convince the airline to agree to a series of steps meant to streamline it before offering a $250m. state loan, which would effectively mean it will be re-nationalized after its privatization 16 years ago. In exchange, El Al would issue $150m. in shares, which the state will buy if no one else does in a public offering.

The airline has not yet agreed to the offer. El Al’s board has yet to vote on Rozenberg’s offer, which would also need shareholders’ approval.

Transportation Minister Miri Regev said she believes El Al must be saved, as did Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz. The ministry’s offer of aid without the airline seeking a buyer is still on the table.

In his letter, Klagsbald requested the younger Rozenberg attend a meeting in person to discuss his offer. Klagsbald explained to the Post that such a meeting is needed to allow the airline to “get an impression of the person seeking to purchase a part of it, concerning his future plans and abilities.”

He said his law firm did not yet hear back from Rozenberg.

Reuters contributed to this report.