Degel HaTorah has set up an organization composed of public
figures involved in housing along with top jurists to assist
chareidi buyers of apartments in Modi'in Illit, Beitar Illit
and Beit Shemesh affected by the Heftziba bankruptcy. In each
area the situation is different.
At present the plan is to hire a large legal firm to
represent the thousands of chareidi purchasers and contend
with the heavyweight creditors like the banks and the
contract building companies that worked with Heftziba. The
organization would provide general support as well as legal
backing.
MK Rabbi Moshe Gafni and Modi'in Illit Council Head Rabbi
Yaakov Guterman reached an agreement with the legal advisor
of the civil administration and a police representative that
those who have recently taken up residency in the Heftziba
project in Modi'in Illit would not be evacuated from the
apartments pending legal inquiries. Rabbi Gafni said the
evacuation order issued previously due to an unrelated legal
dispute over the land was against the construction company
and the local authority rather than the residents, therefore
the residents should be treated just like those in other
places. In Modi'in Illit the Heftziba project was challenged
by Left wing groups. Their claim that the land was bought
illegally was thrown out, but they managed to delay
completion of the project for many months through unrelated
legal challenges.
Rabbi Gafni visited the Beit Shemesh and Beitar Illit sites,
where he said the situation is much more stable. In Beitar
most of the apartments are already lived in, but Bank Adanim
has placed a lien on 27 apartments bought on paper and is
preventing buyers from taking up residency.
In Beit Shemesh, as well, most of the apartments are in the
final phase of construction. Rabbi Gafni met with Councilmen
Rabbi Moshe Montag, Rabbi Dovid Weiner and Rabbi Mordechai
Berger to advance the matter of taking up residency at the
site and arranging for electricity and water hookups. On
Wednesday this week they announced that there were fruitful
talks with an attorney on a plan of action, and they asked
all purchasers to contribute to a common fund.
Meanwhile legal efforts are continuing as part of efforts to
assist buyers in Modi'in Illit. Rabbi Yaakov Guterman set up
a workforce to provide legal assistance and support and to
defend the rights of the apartment buyers. The workforce
includes the local council's legal staff members.
Three private companies in the Heftziba Group and Mordechai
Yonah filed an urgent ex parte request to freeze proceeding
against them and against public corporation Heftziba Housing
and Holdings. An arrest warrant was issued for Boaz Yonah,
the CEO of Heftziba, though his current whereabouts are not
known. Several senior officers of the company were
arrested.
Hundreds of worried families called Degel HaTorah's Jerusalem
office following public notices a committee composed of
rabbonim, public figures, real estate experts, accountants
and attorneys had been formed to advise them on how to save
the apartments they purchased.
Callers expressed their gratitude that for the highly
professional committee that had been set up with the backing
of gedolei Yisroel shlita to address serious, complex
problems, based on consultations with some of Israel's
leading attorneys.
The bankruptcy of a large company like Heftziba has numerous
legal ramifications and demands very carefully considered
action every step of the way. The major creditors are liable
to take advantage of buyers' lack of information; in some
cases banks have already contacted buyers independently,
asking them to produce various documents and other proof.
Last week Atty. Hagai Ulman, the receiver representing
Discount Mortgage Bank and Bank Yerushalayim, raided the
offices of Heftziba Construction, Development and Holdings in
Jerusalem, gathering documents including resident files,
accounting documents and computer data.
During the raid almost all company employees were on hand,
including CEO Mordechai Yonah. At first there was tumult at
the scene, but as soon as they were shown the orders
permitting the confiscation of documents the employees showed
little resistance. According to bank representatives, "They
gave the impression they wanted to cooperate and help the
apartment buyers."
"In the various reports and documents we took we expect to
see the real situation," said Ulman. "We know of significant
gaps between what Heftziba presented to the banks and what
was carried out in practice: [Heftziba] sold apartments and
collected money behind the banks' backs. We hope and
anticipate that the data in the company computers correctly
describes the reality."
Bank Discount claims the Heftziba Group owes it NIS 125
million ($30 million) while Bank Yerushalayim claims the
group owes it NIS 34 million ($8 million).
