Hapoalim: Heftsiba is lying in its motion to halt legal steps - Haaretz

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Thu., August 09, 2007 Av 25, 5767

Israel Time: 02:07 (EST+7)

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Hapoalim: Heftsiba is lying in its motion to halt legal steps

By Nurit Roth and Shlomi Sheffer

Bank Hapoalim alleges that the imploding property development company Heftsiba misrepresented the facts in its motion to suspend legal proceedings against four of its subsidiaries. In short, it lied. In other Heftsiba news, Hapoalim stated yesterday that the bankrupt builder's clients who bought apartments in projects the bank had financed, would get their flats.

The bank was responding to Heftsiba's motion to halt legal proceedings against four privately-owned group companies, ahead of a hearing scheduled for today.

Hapoalim says it suspects Heftsiba of committing fraud, hence its opposition to staying proceedings against the companies. It has asked the court to void the temporary stay of proceedings granted earlier this week against the Heftsiba units, by the Jerusalem District Court.

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There are discrepancies between the figures known to the bank, and the figures the Heftsiba group companies presented in their motion to stay proceedings, Hapoalim claims. It argues that in its motion to stay proceedings, the Heftsiba group presented misleading information, committing fraud.

The discrepancies arouse suspicion that the Heftsiba group companies presented incorrect reports about their projects' progress and that the money homebuyers paid was siphoned out, Hapoalim claims.

Regarding the construction of a specific project in Maaleh Adumim for which Hapoalim had loaned money, the bank claims that 18 apartments remain to be sold, while the Heftsiba motions indicate that all were already sold.

Therefore, Hapoalim writes, "the group's collapse begs a rapid, comprehensive investigation during the course of receivership or liquidation proceedings."

Through the law offices of Haim Zadok Advocates, Hapoalim says that the motion the Heftsiba companies presented fails to mention how they'd pay their bills. The companies didn't cite any specific facility that would finance them throughout any stay in legal proceedings that the court might allow, Hapoalim says. That alone is grounds to overturn the stay, the bank argues.

The bank also claims that the motion doesn't lay out a plan to restructure the companies, and notes that Heftsiba chief executive Boaz Yona fled from Israel, which buttresses its conclusion that the group harbors no genuine interest in trying to rehabilitate itself.

Hapoalim wants receivers to be named on behalf of each bank to which Heftsiba owes money. They would act to complete the construction of building projects, the bank says, and to have the apartments sold and occupied.

Bank Hapoalim stated yesterday that Heftsiba clients who bought unfinished apartments in projects the bank had financed, would get their flats from the receiver as soon as possible.

The projects in question are in Har Homa, Jerusalem, which consists of 60 apartments, and the Nofei Sela project in Maaleh Adumim, which consists of 102 housing units.

The apartments can be completed because of an agreement between the bank and the receiver on behalf of the Danya Cebus group, which is building both projects.

Nor will buyers have to pay any extra amount beyond payments to which they'd committed, Hapoalim says.

The bank added that Danya Cebus would expedite construction as much as possible to enable occupancy of the properties as soon as possible.

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