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The District Court: The Misgav Ladach Hospital Non-Profit Association will be liquidated, disregarding future tort claims

As part of the liquidation procedures of the Misgav Ladach hospital, the issue of the Association's liability as regards unknown tort creditors was addressed.

As part of the liquidation procedures of the Misgav Ladach hospital, the issue of the Association's liability as regards unknown tort creditors was addressed. This issue has weighty ramifications, in light of the nature of the insurance policy that was purchased by the Association even before the liquidation process began.
In light of the Attorney General’s position, according to which dividends will not be distributed to creditors as long as a source for payment of damages resulting from medical malpractice claims was not guaranteed, and because the liquidator must ensure that insurance cover is available against future tort claims until the end of the limitation period, the liquidator was forced to purchase a professional liability policy with a scope of millions of shekels.
The liquidator, who was against the purchase of such insurance cover, contacted the District Court in Jerusalem, through Adv. Ziv Lev and Adv. Moshe Merdler, with a request to provide instructions, within the framework of which the court was petitioned to determine that the Association’s liquidation process would disregard future tort claims.
The District Court in Jerusalem accepted the liquidator’s position, dismissed the Attorney General’s arguments, and held that the distribution of dividends to creditors, including the employees and company pensioners, would be implemented while disregarding the existence of tort creditors, if and inasmuch as a claim has yet to be filed with the court. The significance of this is that tort claims will not be filed against the Association in the future.

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