Bankruptcy fears prompt homeowners to break into apartments

Heftsiba Global Ltd. had been in the process of constructing some 4,000 apartments; debt reportedly between NIS 700 m. to NIS 1 b.

jp.services1 (photo credit: )
(photo credit: )
At 3 a.m. on Thursday, Avraham Firestone was woken by a call from a friend warning him that one of Israel's largest construction companies, Heftsiba Global Ltd., was on the verge of bankruptcy. Fearful of losing the $100,000 Modi'in Illit apartment he had paid Heftsiba to build but had yet to take possession of because of a court edict, Firestone raced to his new home and was there within 15 minutes. "I was told to 'Get up and run,'" he told The Jerusalem Post. So he went - and broke into his home-to-be via a neighbor's porch. Firestone was one of hundreds of buyers who ignored the law and warnings from police on Thursday and took possession of the homes they had purchased from the company in cities and towns throughout the country, including Beitar Illit, Ma'aleh Adumim, Beit Shemesh, Jerusalem's Har Homa neighborhood and Kfar Yona. They were so concerned they would lose their homes if they did not move in immediately, they ignored the condition of the apartments, which in some cases were unfinished. Some of the apartments lacked doors and windows, and had no electricity supply. News of the company's possible bankruptcy sent tremors through the construction industry. It also sparked fear of a massive forced-eviction operation by police who say that the presence of many of the home owners at this time is illegal. Heftsiba had been in the process of constructing some 4,000 apartments when the surge of panic hit on Thursday. While there had been rumors for weeks that the company was in trouble, concern rose to fever pitch when it was learned that the company Electra Real Estate had pulled out of two business deals that would have given Electra a 90 percent stake in Heftsiba. A spokeswoman for Heftsiba said she had no response regarding the company's financial state or to reports that hundreds if not thousands of people had broken into the homes. A number of Web sites reported that Heftsiba's debt was NIS 700 million to NIS 1 billion. Modi'in Illit Council Member Yitzhak Ano said 500 apartments in his community alone were affected. "People are saying that if the company is going to go bankrupt, we should save what we can," Ano said Ano, noting that an impromptu telephone chain was set up late Wednesday night and early Thursday morning to warn the buyers. Ofer Rappaport, who bought a home in Kfar Yona that he did not succeed in breaking into, said he was also working to organize the clients of Heftsiba and had posted information on the Web site A number of haredi purchasers dismissed reports that they had been given permission to enter the apartments by their rabbis. Some Heftsiba clients who spoke to the Post said the stance of Jewish law on the permissibility of what they were doing was not immediately important to them. "Are you kidding me?" asked A, 32, who broke in to her Heftsiba flat in Beit Shemesh. "Do you think that someone who is about to lose $160,000 goes and asks a rabbi? People came in the middle of the night. People without cars took taxis or hitchhiked. They broke into the houses by force. They switched the locks. The rabbis were not in the picture." Bezalel Kahn, a spokesman for Beitar Illit, also said the first thing on peoples' minds was to save their assets. "I don't think too many people are taking the time to ask the rabbis," said Kahn. "They are too busy trying to save their money." The police spokesman's office responded Thursday evening that the National Headquarters had "instructed districts to act according to the law and according to the acceptable procedures for evicting the squatters. According to proper procedure, police will begin proceedings only if the building company files an official complaint at a local police station. Should that happen, police will assist in the squatters' removal in accordance with the stages demanded by the law." Police sources emphasized that should all of that occur, the first stage required prior to eviction would be issuing official eviction orders to the owners. They stressed that if the scope of the break-ins was extremely large, police would have to hold official situation assessments to determine a systematic way to confront the problem. If not, they said, the situation would be dealt with on a district-by-district basis. In any case, police emphasized that no evictions would occur before the weekend, as no eviction orders had been issued. Separate from the issue of bankruptcy, construction of the Modi'in Illit homes by Heftsiba has been frozen pending a petition before the High Court of Justice regarding the legality of the construction, given its placement over the Green Line.