Last update - 00:00 10/08/2007
Developer Heftsiba leaves 500 families without apartments, guarantees
By Nurit Roth
Around 500 families that bought apartments from developer Heftsiba have been left with nothing: They have neither their apartments nor bank guarantees.
These 500 apartments were sold and partially or completely paid for but the banks who provided financial backing for the projects had not been informed about the sales. So the buyers never received the legally required bank guarantees for their investment, according to a report submitted to the court Thursday by the official receiver, attorney Shlomo Shahar, who was appointed as the trustee at the beginning of the week for the ailing construction firm.
According to the report, the number of apartments at various stages of construction in all of Heftsiba's projects reaches 4,048. Of these, the company reported that 2,808 had been sold, but the banks had only been informed of sales of 2,311 apartments.
The receiver's report was submitted Thursday to the Jerusalem District Court as part of a session on the future of the company.
Mordechai Yona, Heftsiba's owner and founder, was invited to the session, but submitted a request at the last minute to allow him to be represented by his lawyer due to his age and poor health. Presiding Judge David Cheshin, the deputy president of the Jerusalem District Court, approved Yona's request, and the medical documents he had submitted were kept private.
A lawyer representing buyers had demanded Yona's presence to shed light on what happened at the firm.
In the end, Cheshin ruled to extend by 15 days Heftsiba's period of protection from creditors, as the trustees investigate deeper into the state of the company.
Shahar's report stated that "priority should be given to a clear and structured process of liquidation, instead of the possibility of examinations and a freeze [on creditor's actions against the firm], which are unclear at this stage." He said that liquidation is the proper process, in particular to allow an immediate investigation to reveal the causes of the company's collapse.
Shahar said there is no reason to allow a stay of roceedings because he has not received any plan from eftsiba's owners on how to save the firm through a ehabilitation plan. Yona has also not made any offer for he financing needed for such a process.
But Shahar said that before a decision is made for iquidation in favor of the creditor banks, it must be seen if the banks are willing to provide some compensation to he buyers who do not have bank guarantees. He said that some of the banks have expressed a willingness to do so.