Bank Seeks Israeli Real Estate Queen's Personal Assets to Cover Debt

Mizrahi Bank plans to request a court order as the government works to ensure assets remain available to pay overdue tax by developer.

Inbal Or in court
Nir Kedar

The government and Mizrahi Tefahot Bank are in a race to get a hold of the personal assets of Inbal Or, the once high-flying real estate developer, after her company was dissolved and police launched a criminal probe into her business activities last week.

The unlikely competition came amid a day of legal maneuvering by those connected to Or’s real estate empire, which has been unravelling since tax investigators arrested her in February on suspicion of using false invoices and concealing tens of millions of shekels worth of transactions from the tax authorities.

Or herself was at the center of a small drama Monday when she failed to appear for questioning by police investigators. Police later found her at the hotel she has been staying since abandoning her luxury apartment, but did not insist that she come along with them for questioning.

The authorities have ordered Or to produce documents implicating certain employees in embezzlement, believed to be in her possession.

TheMarker has learned that Mizrahi, Israel’s fourth-largest bank, plans to seek a court order to turn over her personal assets, which Or had pledged against loans the bank said are worth 17 million shekels ($4.5 million).

Meanwhile, the Jerusalem Magistrates Court agreed to a request by the Israel Tax Authority to bar Or from conducting any real estate transactions, including those pledged as collateral against her debts.

The authority acted in hopes of securing debts she owes, which amount to 17 million shekels. Sources said that if Mizrahi succeeds in gaining control over Or’s personal assets, which include apartments owned by her as well as her companies, the state was unlikely to collect on its debt.

Any move by Mizrahi to seize Or’s assets requires the consent of Eitan Erez, the attorney appointed to liquidate Or’s businesses, Or City Real Estate, as well as the Tel Aviv District Court, which is overseeing the process. In a report, Erez said he estimated Or’s debt to the bank at just under 15 million shekels.

A week ago, Judge Eitan Orenstein ordered Or City Real Estate, which until its collapse was one the leading companies developing real estate projects through group purchases by home buyers, to be put into liquidation. He also appointed a receiver for Or’s personal assets as well as a restraining order barring her from leaving the country.

Or, for her part, is fighting to keep her Land Rover jeep. On Monday, Orenstein gave her 24 hours to explain why she should keep the vehicle after Erez sought to seize it over the weekend and sell it together with other assets to raise cash.