Court Approves Distribution of Dividends Despite Having Doubts Regarding Company’s Long-Term Solvency
Categories: Capital Markets, Corporate and M&A
In a recent decision, the Financial Division of the District Court of Tel Aviv – Jaffa (the Hon. Ruth Ronen, J.) determined that a court may permit a company to distribute dividends even if reasonable doubt exists as to the company’s long-term solvency, so long as its long-term creditors agree to such distribution (Civil Claim [Econ. Div.] 62924-03-18 IronSource Ltd. v. Registrar of Companies (6.5.2018)). The circumstances of the IronSource matter are very case specific and uncommon, however some comments made by the court in its ruling are noteworthy.
