During the course of an appeal concerning the realization by a
creditor of a security interest in real property at a time when the
debtor was in the midst of an insolvency proceeding, the Israeli
Supreme Court reviewed certain principles regarding the realization
of secured assets. The Court held that although in general a
secured creditor may act independently of other creditors and
outside of any parallel insolvency proceedings involving the
debtor, in certain situations the interests of these other
creditors must be considered.
The Supreme Court reviewed a distinction developed over the
years in the lower instance District Court decisions. According to
this line of cases, the Court recognizes that when a debt owed to a
secured creditor exceeds the value of the secured asset, that the
creditor's interest lies in maximizing proceeds received from
the asset in order to repay as large a proportion of the debt as
possible. In contrast, when the outstanding debt is less
