Financial Troubles Halt Construction on 7-Building Residential 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 at market prices. The petition claims Megad LeMishtaken owes approximately 65 million shekels to the financiers under a closed financial support agreement for the project.

Megad LeMishtaken reportedly 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 executing contractor, M.G.A.D. Building and Investments, affiliated with Megad LeMishtaken, filed for insolvency and had trustees appointed. M.G.A.D. reportedly owes 107 million shekels and has been under court-appointed trustees since earlier this month.

So far, 56 apartments have been sold, with 29 remaining unsold. The petitioners, represented by attorneys Hagai Ulman and Noa Solomon from Yehuda Rohe & Co., requested an expedited hearing during the court recess, citing serious safety hazards and risks to creditors due to the abandoned construction site. They warned that creditors or others might seize materials or equipment, causing irreversible damage.

They asked for Ulman to be appointed temporary receiver immediately to secure the site and prevent further harm until project completion. The major shareholder of Megad LeMishtaken, Assi Morad, also holds a 50% stake in M.G.A.D. No court decision has yet been made on the request to appoint a receiver.