Three subsidiaries of Heftsiba Building Development & Investments Ltd. today applied to the Jerusalem District Court for an ex parte urgent stay in proceedings for protection from creditors. The petitioners say that Heftsiba owes NIS 1.6 billion, including NIS 818 million to the banks for credit and guarantees, NIS 500 million to unsecured creditors (suppliers), NIS 312 million to parties at interest, and NIS 10.6 million in priority creditors (including NIS 2.5 million to employees and NIS 2 million each to the Israel Tax Authority and the National Insurance Institute).
The petitioners also said that, in addition to rights in the outstanding balances in various projects, if any, they have the right to receive NIS 204 million and inventory of 1,020 apartments in various stages of construction, the value of which cannot be estimated at this time.
Heftsiba Building's collapse will likely leave a great many suppliers, apartment buyers, and other service providers without all or most of their money.
Heftsiba managers in Israel, as well as its owners, president Mordechai Yona and his son, chairman and CEO Boaz Yona, who are abroad, asked the law firm Shlomo Ness & Co. to represent the company and formulate a request for a stay in proceedings. Sources at the company said that the application has been coordinated with the banks. The company is now examining its precise debt situation, including guarantees under the Sales (Dwellings) (Assurance of Homebuyers’ Investments) Law (5735-1974).
Since Adv. Shlomo Ness is abroad until the end of August, Chaim Kimmel CPA will serve as trustee for the stay in proceedings. He has previously served as trustee for Shmuel Rubanenko & Co., the Hayal Group, and Baranovich group.
The two biggest creditor banks are Bank Hapoalim (LSE: BKHD; TASE: POLI), which is owed NIS 360 million, and Bank Leumi (TASE: LUMI), which is owed NIS 240 million. However, Bank Leumi's exposure to Heftsiba (credit less liens and guarantees) is estimated at NIS 30 million.
Hapoalim’s representative in the case is Adv. Ilan Shavit of the Haim Zadok & Co. law firm, who is an expert in corporate liquidations. Shavit plans to ask the Tel Aviv District Court today for the bank to be recorded as a secured creditor, and for a foreclosure order on properties on which the bank has a lien. The bank has a lien on income-producing properties worth hundreds of millions of shekels.
Published by Globes [online], Israel business news - www.globes.co.il - on August 5, 2007
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