Debtor Seizes Control of Troubled US Real Estate Firm After Millions Lost on Tesla Short

Natanel Lorenz, owner of Dekama, has taken control of the American real estate company Kohan Properties after exercising a lien on its shares. This move follows a period of turmoil for Kohan Properties, which raised approximately NIS 412 million (around $110 million) from investors in Tel Aviv earlier this year through a bond issuance. The company's controlling shareholder, Mike Kohan, had previously been found to have improperly used company funds for personal expenses.

Dekama's seizure of control is a consequence of its decision to enforce a lien on Kohan Properties' shares, making Dekama the sole shareholder. According to Dekama's announcement, this action could trigger the immediate repayment of the company's bonds. Lorenz and Dekama have a history with the Israeli capital market, having previously been fined NIS 525,000 by the Israel Securities Authority for risky investments made with company funds, which resulted in millions of shekels in losses.

These losses stemmed from Lorenz's speculative short-selling of stocks and exchange-traded funds, including those tracking indices and shares of electric vehicle maker Tesla, as well as ARK Invest funds managed by Cathie Wood. These bets failed spectacularly as the targeted stocks rose in value, leading to significant financial setbacks for Dekama.

The takeover marks another difficult chapter for Kohan Properties, which operates in the US commercial real estate sector. Despite raising substantial funds through bond offerings, the company faced revelations that CEO and controlling shareholder Mike Kohan had withdrawn approximately $1.1 million in August, in addition to earlier improper withdrawals, to cover personal debts. Kohan initially apologized and pledged to prevent recurrence, but further withdrawals occurred after the initial scandal broke.

In response to the financial irregularities, Kohan Properties' board reached an agreement with Mike Kohan, leading to his resignation as CEO. He was initially appointed president but was later stripped of this title and his signing authorities as the extent of his withdrawals and liens became clearer. Ran Ben Daniel, the CFO, has taken over as CEO.