Last month I wrote about how El Al was playing dirty.
Eli Rozenberg made an offer to recapitalize the airline and the controlling Borovitz family started digging into an old case that Eli’s father settled with the state of NY in order to discredit and disqualify him from receiving a permit to buy the airline.
The Borovitz family wanted other investors to buy El Al that would allow them to stay in control.
That didn’t happen as other investors like Meir Gurvitz and David Sapir dropped out and the Borovitz family didn’t invest anything into the El Al public offering last week. Instead Eli Rozenberg won control of the airline.
Globes reported earlier today that Eli Rozenberg is planning on replacing El Al’s current board of directors. That’s not a surprise considering what a poor job current management has done both fiscally and from a customer service perspective.
And now Globes is reporting that El Al is asking the state of Israel to block the transfer of the airline as they allege that Eli Rozenberg isn’t the real owner of the airline and that his father Kenny Rozenberg is the owner. Israel’s golden share of El Al requires that the owner of El Al be Israeli, and only Eli has Israeli citizenship.
The complaint can be found here and it’s signed by El Al CEO Gonen Usishkin and El Al general council Dan Fogelman, likely at the behest of the Borovitz family.
This last gasp at keeping their jobs and filing a complaint against the airline’s new owner is just pathetic and typifies everything that has been wrong at El Al. As DDF member ExGingi wrote about the latest move, “It’s emblematic of the failed corporate DNA. Always find the problem with others. Delay, obfuscate, but never take personal responsibility.”
El Al’s current board alleges that Kenny Rozenberg gifted the money to Eli Rozenberg to buy the airline instead of making a loan to Eli. They have no evidence of this. There’s no reason why Kenny Rozenberg can’t be involved in the airline, considering the considerable loan he made to Eli to buy control of the airline.
El Al’s current board could have gracefully handed over control of the airline and apologized for fiduciary misconduct by hiring grossly overpaid and overstaffed labor and squandering customer and travel agent goodwill.
Instead they decided to pick one last fight. Talk about a scorched earth policy!
Good riddance to the old El Al. Don’t let the door hit you on the way out.
Here’s hoping that the Israeli government doesn’t revoke Eli Rozenberg’s permit and that he will be able to create a world class El Al that we can all be proud of.
No HT to tavster? 😉
Preach Dan!
I’m sure that I’m not the only one that chooses not to fly el al due to many reasons.
I hope that Eli can rebuild it and actually get customers like us to fly el al once again.
Some good news (unrelated) ….there’s hope! Just received my refund from ElAl thru chase rewards bh!
You sound as if your surprised by this new development. Sounds like regular SOP for these folks
All of El Al’s faults and past are irrelevant. Much as I dislike El Al, I do believe Kenny is the real owner and the loan was most likely just to satisfy Israel’s requirement. So their complaint is not illegitimate, much as its popular to hate on them for other reasons.
Can a father not loan money to his son? And what makes someone a real owner or not?
Of course it’s possible it’s a real loan and intent is extremely difficult to prove. But not likely. It’s definitely a valid complaint, although the extent to which Israel listens to it depends on how much they really care. It’s designed for Israel’s security, in this case the father presents no concern.
Is it normal for a CEO to file a government complaint for a claim against a new owner that will be impossible to prove?
Would you hire such a person to run your business? It’s a classic scorched earth case and it’s pathetic.
They’re counting on the leftist judges to take their side – all the way up to the supreme court. Especially that the Rozenbergs are charaidim.
Gmar Chasima Tova to Dan the Man – and all of Klall Yisroel.
As long as Eli has legal control its all contrived
Their slogan says it all!
Im not clear what the strategy of the Borowitz family; did they not expect Eli to buy so many shares? They were hoping for prospective bidders to buy a small amount of shares and they would buy majority?
They were hoping for other investors to come in and work with them instead of giving them the boot.
inside negotiations with others to buy lesser shares and permit Borowitz to stay in control?
and once they say Eli bid for that many shares they were not willing to pony up?
Good riddance to the old El Al. Don’t let the door hit you on the way out.
LOL 🙂
El Al is acting like the whiny stepson who reacts to his mother’s remarriage by sulking angrily and going “you’re not my REAL dad!!!!”
you can add, that under new ownership elal has already started processing refunds.
When the board has no other options, the majority shareholder has all the leverage. I’d be shocked if Eli doesn’t prevail here.
Make Elal great (again)
MEGA!
@dan now that they are out, will you publish those sit downs that they asked you not to? Would love to see it.
Yes, would love to read it, sort of a post-mortem special…
The young Padawan Eli Rosenberg will eventually return and get back at the sith board in Episode 6.
“Don’t let the door hit you on the way out.”
It’s clear that Tamar Mozes Borovich is afraid that once Eli and his team get in they will discover all sorts of financial cheating and mismanagement and will likely come after her and her cronies for compensation. This is why she is putting up a smear campaign and this ridiculous fight through surrogates who are beholden to her in a last ditch effort to save herself.
It could her intent were not evil… so I think the smearing might be unfair especially as she is blamed for giving in to orthodox https://www.haaretz.com/israel-news/business/.premium-how-tami-mozes-borovitz-brought-el-al-down-before-the-coronavirus-1.8932536
In my opinion, I believe she is afraid Eli will uncover years of cheating in the company by her and her cronies as mentioned in my original post. If that is not the case, then why is she so antagonistic to Eli and not thankful to him for making such a risky investment and pledge to work with him to improve the company?
Dan for CEO!
What is the capital stack? Is there debt in the recapitalized entity? Is it secured and are there unsecured assets? What will equity pwrcentages be?
I’m sure Kenny is more than smart enough not to make what would be a taxable gift of $100M. I’m sure he has a fine team of accountants and lawyers to work things out within the parameters of all the laws.
your vision sounds way to good to be true Dan!
ELAL as an amazing airline competing in the world stage of brilliant airlines? Only in Yemos Hamoshiach!
If 2020 isn’t yemos hamoshiach, I don’t know what is.
From your mouth to Gd’s ears, we can all use moshiach these days
Classic El-Al. Take the money and then refuse the service. Take his money for the shares and then refuse to give over the company…
LOL!
It’s ironic, I have been to Israel so many time BH (never enough) I have never flown ELAL. I was supposed to the 1st time this summer but my flights were canceled due to corona. Luckily I purchased the tickets from Chase sapphire and they helped me get my money back (or at least just gave me my money back)
Dirty pool? I’d rather read about Bibi bringing his dirty laundry to Washington, for cleaning at American taxpayer expense.
Dan,
May I suggest you pen an open letter to Eli Rozenberg and board of ElAl in which u make several point by point suggestions and recommendations for the viability and future of the airline. A letter like that coming from you, would likely get traction.
Dan – don’t hold back – tell us how you really feel…
It seems strange the citizenship requirement. In a capitalist economy why should it matter who owns the airline providing they are not an enemy of the state.
Dan I’m surprised at you!
Is this how you know ELAL?
Is this what you would expect from Israelis?
How do you have the guts to put in the headline of this post the words “One Last Time”? What gives you the confidence to say that this is the last time? Such a bold statement can only be done in retrospect after everyone is already dead!
There may be more fighting, but it won’t come from the current board after this move.
Got to punch back twice as hard!
https://en.globes.co.il/en/article-rozenberg-el-al-board-not-pursuing-airlines-aims-1001343832
Borovitz family has miss managed El al for 18 years
They have miss managed El Al for 18 years
They have miss managed El Al for 18 years
(Borovitz family)
Will Kenny seize the airline from his son, now that he made an Aliyah?