2024-03-21 18:57:27
The debts of the Rom Kinneret real estate company reach alarming proportions: a proposal recently submitted by a group of investors to purchase the company that is in insolvency proceedings reveals that the scope of the debts reaches approximately NIS 210 million. Lawyers Uriel Zaira and Guy Sarosi, who represent some of the creditors, claim that the debt is even greater, Because the list of debts in the proposal does not include many debt claims that they themselves filed against the company.
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The Rum Kinneret case made headlines last August, when it became clear that the company ran into difficulties due to accumulated debts, towards many creditors – including apartment buyers, contractors and financial institutions. The company claimed at the time that the company was in a cash flow crisis due to the challenging economic reality, but a report submitted about a month later by the company’s trustees, lawyers Ehud Gindes and Shay Milo, reveals problematic conduct. The report noted conduct that includes “the shrewd use of a well-oiled marketing system” – this without any of the company’s projects being actually completed – as well as the execution of “virtual apartment” transactions, due to a mismatch between the apartments sold to buyers and the plans and building permits given to the projects.
These days, an insolvency proceeding regarding the company is underway in court, in which more details are slowly being revealed about the depth of the “pit” in which the company is. Now, it turns out that the debts are also larger than claimed: if initially there was talk of a debt of 137 million shekels, now the buyers – among them the previous owner of the company, Ilan Sasson – claim that the debt is about 200 million shekels, and that is not the end.
“Rom Kinneret is a sting company, a bubble company”
The offer to purchase the company was recently submitted by a group of investors consisting of several companies: the Menashe Gafni Group, the Oriya Enterprises Company and the Atlas Finance Group, to which the Afikim-Gasham Group also joined. The proposal: the injection of NIS 190 million in exchange for the purchase of the company’s shares or the allocation and purchase of all its assets, as well as some arrangements related to the legal proceedings taking place in this regard, which according to the proponents reflect a total value of NIS 220 million for the proposal.
“The bidders examined the problems raised in the trustees’ report, and prepared an outline of a creditor arrangement that would give them the best answer to the set of problems raised by the trustees,” the purchase proposal states. The proposal contains a response to the difficulties, problems and challenges raised by the trustees in the trustees’ report.”
The proposal includes a series of solutions regarding the Rom Kinneret company’s projects that were included in the trustees’ report, but the most interesting is the breakdown of the company’s debts, according to them: approximately 217 million shekels, of which 104 million shekels are secured debts (secured creditors are those who have a guarantee for the repayment of the debt; These are mainly banks and financial entities to which the company owes money – NIS), NIS 69.9 million in debts to contractors and suppliers and NIS 43.29 million in debts to apartment buyers. Among the creditors, you can find the Tax Authority, the Tel Aviv Municipality, the Menorah company and more.
However, this amount is not final: first, the proposal is about a special arrangement made with another financing company, Kvan Solutions, for which the debt is NIS 8.5 million. What’s more: lawyers Zaira and Sargosi, who represent company employees and apartment buyers who are also considered creditors of the company, claim that some of the debt claims submitted against Rom Kinneret are not in the proposal at all.
“The proposal refers to Rum Kinneret as a business that failed, but Rum Kinneret is a stingy company that has never built a single apartment,” say Attorney Zaira and Attorney Sarosi in a conversation with Globes. “This is what is called a bubble company, a thermal company. There is no reference to our customers in the settlement proposal. Out of at least 15 debt claims submitted by us to date, only two names appear in the proposal. The amounts of debt mentioned in the proposal are only the beginning, and do not include the most problematic debts, created fraudulently. Such debts are debts from which there is no discharge.”
Attorney Uriel Zaira / Photo: Tomer Shukri
Attorney Guy Sarosi / Photo: Ilan Esseig
In the proposal, the potential buyers state that 100% of the debts to the secured creditors will be paid, but regarding the creditors in Kadima (they also have some priority, but the proposal does not specify who they are) only 70-50% of the debt, which amounts to NIS 12 million, will be repaid. Unsecured creditors, including mainly contractors and suppliers, will be repaid only 40% of the debt, according to the proposal.
Despite all this, the bidders point out that “there is a reasonable possibility” that their bid will be accepted by all of the company’s creditors. Attorney Zaira thinks differently: “We will not accept this proposal, because it does not refer to our clients. If it includes the ‘stung’ and defrauded customers, we will consider the matter.”
*** Presumption of innocence: The fraud suspicions were raised by the trustees in the report only, and those involved have the presumption of innocence.
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