Caught - at least in its own opinion - between a rock and a hard place, the state on Tuesday reluctantly asked the High Court of Justice what to do about the dozens of families who have moved into their homes in Modi'in Illit after hearing that their contractor had gone bankrupt, even though a court order prohibited them from doing so. The alleged dilemma involves the neighborhood of Matityahu East, where the Heftsiba building company is constructing 400 apartments for haredi families. On January 4, 2006, the Peace Now movement and residents of Bil'in, a neighboring Palestinian village, petitioned the High Court, charging that the apartments under construction by Heftsiba and another company, Green Park, were being built according to a zoning plan which had not been legally sanctioned. Two days later, the court issued an interim injunction instructing the respondents to immediately halt all construction, prevent home purchasers from moving in to finished apartments and desist from transferring ownership deeds to them. That injunction has been in effect ever since. Meanwhile, two weeks ago, when prospective purchasers of homes built by Heftsiba all over the country, including Matityahu East, heard that the company was collapsing, many of them broke into the apartments they had bought to try to ensure that they would not lose their investment. The bankruptcy case itself went to Jerusalem District Court. On August 6, Judge David Cheshin handed down a series of rulings, including one that called on the authorities not to evacuate the purchasers who had illegally moved into the apartments. Cheshin did not distinguish between the squatters in other Heftsiba projects and those in Matityahu East. The police, who had been preparing to evacuate the squatters, halted their preparations in the wake of Cheshin's decision. Over the coming days, the petitioners' lawyer, Michael Sfard, called on the state to evacuate the Matityahu East squatters because of the High Court's interim injunction. "The High Court of Justice issued an order banning entry to and use of the apartments," Sfard wrote to the state's representative, Orit Koren. "The order is directed at the state authorities. If there is a contradictory order by a lower court, it retreats before the order of the Supreme Court." On Tuesday, Koren asked the High Court what to do. Should it evacuate the Matityahu East squatters despite the district court decision or should it allow them to remain despite the High Court's interim injunction? One way out of this dilemma is for the High Court to rule on the original petition filed by Peace Now and the Bil'in villagers, demanding that the buildings be demolished. In the meantime, the zoning plan according to which the Heftsiba and Green Park apartments are being built was approved. It has already heard the case in court and received the summary arguments in writing of all the parties to the dispute. All that is needed now is the court's final decision. Should it declare the buildings to be retroactively legal, the Matityahu East squatters would be in the same position as all the other Heftsiba squatters. Should it declare the buildings illegal, all of the residents, including those who moved in before the interim injunction was handed down, would be forced to leave. This, however, is only one of the possible scenarios.