Electra and Kozenoyev Family Clash Over Luxury Tower in Tel Aviv

Electra Ltd. announced on Sunday a major business and legal dispute concerning the "Bereshit Tower," a high-profile and delayed luxury residential project in Tel Aviv's Bavli neighborhood. Electra Construction, a subsidiary of Electra Group, and "Bereshit Daniel Towers Ltd.," the project's developer owned by the Kozenoyev family, have filed massive mutual lawsuits as part of an arbitration process.

Electra Construction's lawsuit claims approximately NIS 270 million for work performed, changes to execution plans, delays caused by the developer, and compensation for alternative returns and lost profits. Electra also cited external factors that hindered the project, including the fire that broke out in the building during construction.

The developer, the Kozenoyev family, has filed a counterclaim for NIS 900 million to NIS 1 billion. This suit focuses on allegations of delays by the construction company in meeting work deadlines, which they claim impacted apartment sales and Electra's contractual obligations. Electra noted that some of the financial figures claimed by the developer are identical to those in a separate lawsuit the developer is pursuing against the insurance company Migdal for NIS 480 million.

"At this preliminary stage, it is not possible to assess the chances of the mutual claims," Electra stated. The Bereshit Tower, standing 156 meters with 43 floors and 174 apartments, has faced difficulties since its inception. The project, built on land previously occupied by the Amal Bet neighborhood residents who were controversially relocated, began excavation in 2018 with an original occupancy target of summer 2023.

A large fire in early 2023, attributed by the developer to an electrical short, and other delays, including those related to the security situation, pushed back completion by about two years. These delays have led to lawsuits from apartment buyers, including a NIS 46 million claim filed in March 2024 by four buyers and another filed in February by a buyer citing a two-year delay. Despite the setbacks, demand for apartments in the tower remains strong, with prices significantly exceeding initial projections from 2016.