Bank Leumi Seeks to Seize Assets Over $75 Million Debt from Developer

Bank Leumi has asked the Tel Aviv District Court to enforce security agreements on land in Bat Yam and Beit Shemesh belonging to A.S. Yigal Entrepreneurship and Construction, a company controlled by Raanan Halili. The bank claims a debt of NIS 277 million (approximately $75 million) from the stalled Bat Yam project and NIS 13 million (approximately $3.5 million) from the Beit Shemesh project. Leumi is requesting the appointment of attorney Guy Gissin as a receiver for these assets.

According to Leumi, one of the company's owners, Shlomo Avitan, admitted in June that A.S. Yigal is "a corpse." The bank asserts that A.S. Yigal has fundamentally breached its obligations, failed to meet its credit repayment commitments over an extended period, and is experiencing significant financial distress. Leumi stated that Halili and Avitan have provided unlimited personal guarantees for the debts, while former partner Dudu Ben-Zaken's guarantee extends up to NIS 1.6 billion (approximately $430 million).

The Bat Yam project, intended to be a 43-story tower with 206 apartments, has been halted shortly after excavation began. Leumi had provided NIS 650 million (approximately $175 million) in financing for this project. The bank claims A.S. Yigal failed to provide the required NIS 112 million (approximately $30 million) in equity and experienced significant delays in obtaining a building permit. A severe dispute between the company's owners led to a change in the contractor, causing a dramatic cost increase and exceeding the bank's initial projections.

In addition to the Bat Yam project's debt, other creditors have also sought to enforce security agreements. Last month, Mercantile Bank requested the seizure of assets related to a NIS 181 million (approximately $49 million) debt. The insurance company S. Shlomo and financing solutions firm Kwan also filed claims for NIS 64 million (approximately $17 million) in debts related to projects in Be'er Sheva.

The Beit Shemesh project, comprising 12 buildings with 358 apartments, is complete, and most units have been occupied. However, a remaining debt of NIS 13 million (approximately $3.5 million) continues to accrue interest. Leumi also noted that enforcement proceedings have been initiated against A.S. Yigal, leading to liens on its Kiryat Ono project, valued at NIS 300 million (approximately $81 million). Leumi concludes that the company faces comprehensive financial distress, not just a temporary issue with a single project.