Murdered real estate developer leaves huge debt tangle

Eldad Peri  credit: Eyal Izhar

Trustees for Eldad Peri's companies and assets say their work will not be affected by his death.

The list of those harmed by Eldad Peri (44), the real estate developer shot dead in the street outside his synagogue in Rehovot on Friday morning, is a long one. Peri is suspected of having spun a web of illusions over the years, and apparently ran a Ponzi scheme with the money he received from members of buyer groups, needing a constant inflow of new money to finance previous activity, without which the business goes into freefall, as happened to Peri.

Eldad Peri left behind him debts of hundreds of millions of shekels and a series of lawsuits over money that disappeared, payments that never reached trustee accounts, multiple caveats in Tabu (the Land Registry), loans upon loans that were never repaid, and failure to provide collateral to buyers.

His affairs are now being managed under two trusteeships: one of Adv. Ohad Gindes and Adv. Gonen Kestenbaum, who are acting as trustees of Peri's group of real estate companies, and the second of Adv. Erez Haver, who was appointed provisional trustee of Peri's personal assets. Gindes and Kestenbaum released a report last October, while Haver published his report two months later.

The findings of the trustees' examinations are similar. According to Haver, the Peri group and Peri himself had debts totaling NIS 330 million. The report by Gindes and Kestenbaum reached a total of NIS 315 million. The difference is apparently represented by additional personal debts unconnected to Peri's companies.

In addition, many other creditors have sued Peri's companies for much higher sums, so that the number of those injured by Peri and the amount of the damage are probably far higher than the trustees stated in their initial reports.

For all that, Peri continued to lead his normal life, at least to outward appearances, even after he got into financial difficulties. His main assets were a house in Rehovot, a loft apartment in which his ex-wife lived, a Jaguar saloon and a Mercedes SUV. The Jaguar was sold, and petitions were filed in the Central District Court for the realization of the other assets. The house and the loft will shortly be shown to interested buyers, after which an auction will take place. The Mercedes, which is several years old, will also be offered for sale. It is estimated that all these assets will bring the trustees a total of about NIS 9.5 million - far from enough to placate the creditors. Following the murder, Adv. Haver is expected to become the executor of Peri's estate.

During the good times, Peri's ostentation included luxury offices in the Azrieli Towers in Tel Aviv, massive advertising, investment in football clubs, huge salaries for well-known managers, appearances at business conferences, and so on, all in order to project an image of a businessperson in the big league.

According to Adv. Haver's initial report, however, most of Peri's assets were mortgaged to support his business activity. In fact, it was found that it was very difficult to separate between Peri himself and his companies, and that Peri was designated the borrower in loan agreements amounting to at least NIS 280 million. "To advance projects by the companies, loans were taken amounting to substantial sums by the Peri group from non-bank lenders, and as part of the collateral given to secure these loans, besides mortgages on the plots of land that were the subjects of the loans, the debtor mortgaged his private assets," Haver's report states.

The question now is, how will the creditors be affected by the murder? At least as far as the uncompleted real estate projects are concerned, Peri's absence makes little difference. In their initial work, the trustees Gindes and Kestenbaum emphasized the rehabilitation of Peri's projects, in order to continue with their construction. The two trustees are currently engaged in a deeper investigation into what happened at the companies to cause them to collapse, and the full extent of the financial liabilities. Kestenbaum told "Globes" that the murder had not affected their work in any way.

"In general, apart from in the first week of our activity, we didn't need Peri. He neither added to the case nor detracted from it," Kestenbaum said. "As for the rest, we've investigated, and we're continuing with our investigations, and the murder won't hinder them. Our work has not been harmed at all, and we continue as usual."

Since the murder, Peri's relatives have published claims that he was close to a creditors' arrangement, but Haver says that although such an attempt was made, it was far from a successful conclusion.

"It would have been better for the creditors had he remained alive," Haver said. "When we met for the first time, I told him, 'Be honest. Be open, and we'll help you as much as we can. That's our job. This case will be a dismal one if I discover that you have lied, or under-stated assets, or deceived us with false reports. If you want our help, we're here, and we'll cooperate, but be honest. Report everything. But if I find once that you've concealed something from us, once and it's over.' A far as I know, he did not deceive us."

Published by Globes, Israel business news - - on October 17, 2021

Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Eldad Peri  credit: Eyal Izhar
Eldad Peri credit: Eyal Izhar
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