Financial Collapse Halts Construction of 7-Building Housing Project in Kfar Bara

Top Capital and Phoenix filed an urgent petition on Tuesday at the Central District Court seeking to enforce liens and appoint a receiver over Megad Lemishtaken's rights in a residential project in Kfar Bara. The project, financed by Phoenix and Top Capital, involves seven buildings with 85 apartments, including 35 subsidized units and 50 sold at market prices. The petition claims Megad Lemishtaken owes approximately 65 million shekels under a closed financial support agreement for the project.

Megad Lemishtaken won a tender from the Israel Land Authority and the Ministry of Construction and Housing to lease the land for the development. Although the project is about 81% complete, construction has completely stopped after the contractor, M.G.A.D. Building and Investments, affiliated with Megad Lemishtaken, filed for insolvency proceedings and was assigned trustees. M.G.A.D. reportedly has debts totaling 107 million shekels, and the court recently appointed trustees for it.

So far, 56 of the 85 apartments have been sold, with 29 remaining unsold. The petitioners argue that the construction site is currently abandoned, posing serious safety risks and significant danger to creditors. They fear that various parties, including creditors, might seize materials or equipment, causing irreversible damage to the project. Therefore, they request the immediate appointment of attorney Hagai Ulman as temporary receiver to take control of the site and prevent further harm until completion.

Megad Lemishtaken's shareholder, Assi Morad, also owns 50% of M.G.A.D. Building and Investments. The petition was submitted by attorneys Hagai Ulman and Noa Solomon from the Yehuda Rohe & Co. law firm. The court has yet to decide on the request to appoint a receiver.