1 The Security Interests Law is referred to in Laws of the State of Israel as the Pledges Law, 5727–1967 (21 L.S.I. 44).
2 The Companies Ordinance (N.V.), 1983, 37 Dinei Medinat Israel (N.V.) 761, articles 1, 164, 166.
3 Article One. Although the article does not explicitly mention sale, judicial interpretation has left no doubt as to its inclusion. Gower's Principles of Company Law (London, 4th ed., 1979) 105. See Bank Leumi Ltd. v. Anglo-Palestine Bank (1972) 26 (ii) P.D. 468–473. See also article 169, which deals with floating charges incorporating an undertaking not to create further charges.
4 See Weisman, J., The Law of Security Interests, 1967 in Commentary on Laws Relating to Contracts, Tedeschi, G., ed. (Jerusalem, 1974, in Hebrew) 24–36.
5 Doukhan, M., ed., Laws of Palestine (1934–1935) vol. 1, p. 347.
8 See Ben-Porat, M., Transfer of Obligations Law, 1969 in Commentary on Laws Relating to Contracts, Tedeschi, G., ed. (Jerusalem, 1972, in Hebrew) 9–10. See also the revised booklet (1978) p. 5.
11 Yekutiel v. Bergman (1975) 29 (ii) P.D. 757, 765; see Zeltner, , Sale Law, 1968 in Commentary on Laws Relating to Contracts, Tedeschi, G., ed. (Jerusalem, 1972, in Hebrew) section 2.
12 A member of the Commission, Mr. Ben-Dov of Bank Leumi, reported this phenomenon.
13 Dr. Meir Tamari of the Bank of Israel pointed out this aspect in his testimony before the Commission.
14 Insolvency Law and Practice, 1982, cmnd. 8558, p. 354 (known as the Cork Commission); Report on Consumer Credit, 1971, cmnd. 4596, (known as the Crowther Report), Article 5.6.5.
15 See introductory note.
16 Mr. Ben-Dov of Bank Leumi noted that he knew of diamond merchants who had incorporated in order to benefit from the advantages of floating charges; he did not, however, possess any precise information as to the scope of this phenomenon.
17 Mr. Lev, presenting the banker's perspective, testified that regarding floating charges, he attributes greater importance to debts owed to his clients, rather than merchandise which they may possess. Merchandise necessitates a search for a buyer, while the former type of security does not.
18 Jackson, and Kronman, , “Secured Financing and Priorities among Creditors” (1979) 88 Yale L.J. 1143, 1158.
19 This testimony was given by Mr. Ben-Dov and Mr. Lev.
20 According to the testimony of Mr. Ben-Dov.
21 Gilmore, G., Security Interests in Personal Property (Boston, Little, Brown, 1965) vol. 1, p. 360.
22 Cork Commission Report, op. cit. supra n. 14, at 345, 34.
23 Abel, A.S., “Has Article 9 Scuttled the Floating Charges?” in Ziegel, and Foster, , Aspects of Comparative Commercial Law (Dobbs Ferry, Oceana, 1969) 410, 413.
24 Cork Commission Report, op. cit. supra n. 14, at 344–345.
25 Schwartz, A., “Security Assets and Bankruptcy Priorities: A Review of Current Theories” (1981) 10 J. Leg. Studies 1, 4–5.
26 McLaren, R.H., Secured Transactions in Personal Property in Canada (Toronto, 1980) s. 5.02.
27 Cork Commission Report, op. cit. supra n. 14, at 4, 32, 34.
28 G. Gilmore, op. cit. supra n. 21, at 360.
29 This is the lesson that may be learned from the Israeli experience with floating charges. A practice has developed according to which such charges are rendered conditional upon an undertaking by the debtor not to transfer any of his assets in the absence of the creditor's consent, with the exception of inventory assets transferred in the ordinary course of business.
30 Cork Commission Report, op. cit. supra n. 14, at 345–346.
31 “Purchase Money Security Interest”, see Gilmore, op. cit. supra n. 21, at 349–350; Jackson and Kronman, op. cit. supra n. 18, at 1167.
32 Bankruptcy Ordinance (N.V.) 1980, Art. 85 (3) (3 L.S.I. [N.V.] 131).
33 Procaccia, U., Bankruptcy Law and Civil Legislation in Israel (Jerusalem, 1984, in Hebrew) 256–257.
34 See Vinograd v. Israel Bank of Commerce (1955) 10 P.M. 76; see also Weisman, op. cit. supra n. 4, at 35 (n. 42), 116.