December 31, 2017 will be the last day of the Company for Location and Restitution of Holocaust Victims’ Assets. The company was founded by Israel as a non-profit organization in August 2006.
In March 2014, "Globes" reported the company's efforts to locate and return assets. The company owned 1,424 dunam (356 acres) of land in Israel at the time. Advocate Elinor Kroitoru, who headed the company Location and Information division, told "Globes" then, in the midst of the location process, which she described as real detective work, that the challenge was becoming urgent, because the window of opportunity for activity would close at the end of 2017. "If we don't succeed in locating heirs in the next four years, it will never happen," she said. December 2017 is already here.
NIS 400 million for the heirs
The Company for Location and Restitution of Holocaust Victims’ Assets was founded in 2006 following hearings by a Knesset investigative committee headed by MK Colette Avital in order to do justice to owners of land and other assets in in Israel who later perished in the Holocaust. Most of these purchases were in the 1930s.
There were a variety of reasons why people purchased land and deposited money in banks during the British Mandate. Most of them, however, did it simply because they were planning on coming here. A £1,000 deposit entitled the depositor to obtain a permit to immigrate to Israel as a "person of means" until WWII began.
The company took steps to trace assets and restore them to their legal heirs. Assets for which no heir was found were used to aid needy Holocaust survivors and institutions for education and memorializing the memory of the Holocaust, "with a clear preference for aiding survivors."
"Globes": How many assets did the company trace in 11 years?
Company for Location and Restitution of Holocaust Victims’ Assets finance and assets coordination division director CPA Amir Shvarz: "During all the years of our activity, we managed to locate assets with a total value of NIS 2.1 billion, including 679 real estate properties worth NIS 840 million."
For how much of this were heirs found?
"Of the NIS 2.1 billion, we managed to locate heirs for real estate property and financial assets worth NIS 718 million, over NIS 400 million of which the heirs already had possession. We gave NIS 1 billion in aid to Holocaust survivors through various instruments, such as paying for drugs at a time when the Ministry of Finance did not pay for them."
NIS 13 million in Kiryat Ata
Considerable assets and land were found in central Israel in cities such as Bat Yam and central Tel Aviv. For example, an entire building was found on Hahashmonaim Street in Tel Aviv whose registered owners were Holocaust victims. When the property was traced in 2014, the building was worth NIS 12 million, and its value has, of course great increased since. The property was transferred to over 10 heirs.
Another example is property in Bat Yam worth NIS 13 million, which was restored to a single heiress in mid-2015. In addition, five tracts of land in the Arubot area of Hadera worth NIS 9 million were restored to five heirs. Five tracts of land in the Kiryat Ata area worth NIS 13 million were restored to 6-8 heirs.
Shvarz says, "Keep in mind that it is over 70 years since the Holocaust, and there are also many descendants who did not survive it. Inheritance therefore reaches to distant relatives, and by law, we can restore assets to third and fourth-removed relations."
In its disposal of assets, the company sold properties in several main areas, including Bat Yam, "in which we awakened the real estate market, and it turned out that much of the available land in the city was held by the company," Shvarz says. "We may have caused a rise in prices, but on the other hand, Holocaust survivors received aid money. There was 0.5 dunam (0.125 acres) of land there on the waterfront sold by a receiver for NIS 24 million. We also located those heirs. They were represented by lawyers who wanted cash for the land, and it was sold with approval from the court."
What did you have when you began?
"The company's value was accumulated during all the years of its activity. When the law was enacted, all the agencies and companies holding assets likely to belong to Holocaust victims were obligated to transfer them to the company, and then we began tracing them. The Location and Information Division was founded in 2011, and before then, we focused on outsourcing. We got most of the assets from the Administrator General, some from Himnuta (the asset company of the Jewish National Fund), and some from institutions that took control of the properties in order to preserve Jewish ownership, both before and after Israel declared independence, because many of the properties were purchased in the 1920s and 1930s. Other property owners were the banks and Israel Land Development Company (TASE: ILDC) (now controlled by Ofer Nimrodi), against which we are still conducting a legal proceeding."
The reason why the company is closing down at the end of 2017 is purely economic. The company emphasizes that it pays its expenses from the assets that it manages, and has reached the point of balance between its ability to trace additional substantial assets and their diminishing amount of money (and money that has been spent on aiding survivors). Shvarz says, "The original period of activity mentioned was 15 years until the end of 2021. In 2013, we reached the conclusion that the correct economic date for closing would be on December 31, 2017. We ran these processes past the Ministry of Justice and parties in the company in the framework of an amendment to the law in March 2014."
NIS 400 million in traced assets of Holocaust victim remains. "What we have not given to owners will be distributed among the Administrator General and the non-profit organization, so that they can continue what we did not manage to finish. For example, the lawsuit against Israel Land Development will be continued by the Administrator General, because in some cases, there is still a clue to whom it belongs."
The company says that its inability to sell these assets stems from Section 37 of the Law for Holocaust Victims' Asssets, which states that the company must complete its investigation, regardless of the value of the asset. Only after the company has reached the conclusion that there is absolutely no doubt that an heir cannot be found can the land be sold for the benefit of Holocaust survivors. The liquidator will not be under this restriction now, and can operate according to the liquidation laws.
How many employees does the company have now?
"20 employees are left. We had 60-62 at the peak. On December 31, we'll turn in the keys."
Published by Globes [online], Israel Business News - www.globes-online.com - on December 24, 2017
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