Trustees Seek to Sue Banks for NIS 480 Million Over Collapsed Real Estate Group

Trustees for the collapsed real estate group Personeal are seeking court approval to sue Discount Bank and Mizrahi Tefahot Bank for over 480 million shekels. The group collapsed in 2024, leaving hundreds of millions of shekels in debt to private investors. According to trustee Shlomi Filiba, the banks allegedly allowed investor funds to be transferred from trust accounts to the group's company accounts without sufficient oversight.

The request was filed by attorney Shaul Kotler, who was hired to investigate the banks' conduct. This marks a significant development in the bankruptcy proceedings of Personeal, which previously focused on tracing the missing funds, recovering money transferred to business partners, and examining the responsibility of the group's controllers.

The planned lawsuit against Discount Bank is for over 105 million shekels, with an additional claim against Mizrahi Tefahot, bringing the total to more than 480 million shekels. Personeal, controlled by Alon Moran and Elisha Eli Lahav, operated in urban renewal, raising funds from private investors at about 9% annual interest as an alternative to bank financing.

An investigation by the trustees revealed that out of approximately 739 million shekels raised, only 214 million shekels were returned to investors, leaving a debt of 525 million shekels. The trustees previously suggested the group operated as a Ponzi scheme. In March 2025, the Israel Securities Authority and Lahav 433 launched a public investigation into the group and its controllers for fraud, theft by an authorized person, money laundering, and fundraising without a prospectus.

The core of the current request centers on the transfer of investor funds. These funds were deposited into trust accounts intended to ensure they were used for the specific project for which the loan was given. However, the trustees claim funds were transferred to various group companies and used for debt repayment and other unrelated purposes. They argue the banks should have detected suspicious activity given the volume and patterns of transfers.

Deposits into trust accounts at Discount Bank between 2019 and December 2022 totaled approximately 404 million shekels. From March 2023 to May 2024, 99 million shekels were deposited into trust accounts at Mizrahi Tefahot, bringing the total examined deposits to 554 million shekels. The trustees' report includes claims against the banking system's conduct, seeking approval to convene creditor meetings to assign claims against Mizrahi Tefahot and Discount Bank.

Some claims against Discount Bank are not entirely new; 83 creditors filed a lawsuit in November 2024 for 63.5 million shekels, alleging the bank allowed trust accounts to be emptied improperly. However, the current request is from the group's own appointed officials, based on a broad examination of bank activities, aiming to hold both banks accountable and increase potential recovery for creditors. Mizrahi Tefahot stated that if a lawsuit is approved, it will respond in court.