Friday, August 10, 2007

500 Heftsiba families left without their apartments or guarantees

By Nurit Roth

Around 500 families that bought apartments from 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 yesterday 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 yesterday 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, approved Yona's request. A lawyer representing buyers had demanded Yona's presence to shed light on what happened.

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 proceedings as he has not received any plan from the owners on how to save the firm. Yona has also not made any offer for financing such a process.

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