Real Estate Firm Weybox Cancels Major Florentin Project Deal Amid Legal Dispute

Real estate company Weybox has reported that the landowners of the "Gvulot Complex" in Tel Aviv's Florentin neighborhood have unilaterally canceled a combination agreement for a major development project. The landowners are demanding offsets and reimbursements totaling at least 30 million shekels, including liquidated damages, expenses, and financing costs. This dramatic move escalates a legal battle that began in August when the landowners sued in the Tel Aviv District Court to enforce the agreement and demand urgent advance payments.

The landowners' decision to cancel the contract entirely, and their subsequent request to the court to withdraw the original lawsuit, follows claims of "fundamental breaches" by Weybox. According to the landowners, these breaches include the company's controlling shareholder entering into a deal to sell his controlling stake without their consent. Previously, the August lawsuit focused on Weybox's alleged failure to pay advances, delays in obtaining building permits, and a lack of a bank financing agreement. At that time, the landowners sought provisional relief for approximately 7.6 million shekels plus VAT and an injunction against encumbering rights.

Weybox, which had acquired the land under the original contract and was set to receive 54% of the project's revenues after an advance of 140 million shekels, stated in August that the chances of cancellation were low. In its latest bourse report, the company's management indicated it is reviewing the new claim but cautiously estimates that the likelihood of the agreement being canceled with the claimed offsets is not high. However, Weybox admitted it cannot fully assess the financial impact of these events.

Separately, Gefen Living and Renewal, controlled by Chairman Tzachi Abu, announced last month a deal to acquire nearly half of Weybox's controlling core for approximately 76 million shekels. This acquisition involves about 93 million ordinary shares, representing roughly 49% of the controlling shareholders' stake and about 25.4% of Weybox's total issued and paid-up capital. It was also reported that Tamir Cohen, who received a 6 million shekel brokerage fee and will receive 5.4% of the shares in the Gefen deal, is likely to purchase additional shares through an option granted by controlling shareholder Yaakov Gorsad.