Mr Justice Morgan has held that a Romanian and a German, resident in Ibiza, are holding a corporate structure, headed by a UK company, on trust for a bankrupt Israeli billionaire, Mr Eliezer Fishman, for the purpose of concealing his assets. At the time of his bankruptcy, Mr Fishman had debts of approximately 3.9 billion New Israeli Shekels (approximately £830 million) – reportedly the largest ever bankruptcy in Israeli history. The claim was brought by Mr Joseph Benkel, the trustee in bankruptcy appointed by the Israeli Court.
The First Defendant, East-West German Real Estate Holding, was incorporated in England in 2016, shortly after a petition had been lodged in Tel Aviv for Mr Fishman’s bankruptcy. East-West then acquired 100% control of a German vehicle that had previously been held in the names of various associates of Mr Fishman, including his three children. Ultimate ownership of this new structure was placed in the name of the Second Defendant, Ms Mirela Helbet, a Romanian national resident in Spain with no obvious connection to Mr Fishman.
Mr Benkel instructed the business intelligence firm ‘Black Cube’ to seek to obtain information, which included the covert recording of three meetings in Vienna with a German lawyer, Mr Markus Rese.Mr Benkel then commenced these proceedings seeking a declaration that Ms Helbet was secretly holding her interests in East West as trustee and nominee for Mr Fishman and an order that she transfer her interest in East-West (and thus the structure beneath it) to Mr Benkel (as Mr Fishman’s trustee in bankruptcy).
In 2018 and 2019, on Mr Benkel’s application, the High Court made orders recognising the Israeli bankruptcy under the Cross-Border Insolvency Regulations; appointing receivers over the shares held by the First Defendant in its German subsidiary; and granting Mr Benkel’s application for a proprietary injunction for the preservation of the shares held by East-West in its subsidiary and of Ms Helbet’s interest in East-West. The High Court subsequently made a further order under the Taking of Evidence Regulation for evidence to be taken by the German courts from Mr Rese and another German national, who had been identified as associates of Mr Fishman.
An 8-day trial was heard remotely in January and February 2021. At the conclusion of evidence, Mr Justice Morgan granted Mr Benkel’s application to join Mr Willibald Dikautschitsch (Ms Helbet’s domestic partner) as a Third Defendant.
In a judgment handed down on 30 March 2021, Mr Justice Morgan held that Mr Dikautschitsch had worked with Mr Fishman’s associates to establish the structure and to place it in Ms Helbet’s name. Ms Helbet had agreed to hold the structure as nominee for Mr Dikautschitsch who in turn was acting as nominee for Mr Fishman, the ultimate beneficiary. Morgan J found that all three of the Defendant’s witnesses were unreliable and granted the order sought by Mr Benkel.