Mehir LeMishtaken complex in Be'er Sheva: Developer faces insolvency and project delays
The Mehir LeMishtaken project in Be'er Sheva by A.Sh. Yagel has become insolvent and will not be completed on time. The company is facing debts of hundreds of millions of shekels and an internal shareholder dispute.
Chaos has erupted at the Mehir LeMishtaken complex in Be'er Sheva, where the developer is facing insolvency proceedings. The project, in development for four years, will not be completed on time, and funds have been returned to only a portion of the apartment buyers. Allegations suggest that a dispute between the company's shareholders is a primary factor in the crisis. A recent request for receivership regarding other company projects has been filed, and the Tel Aviv District Court has decided to consolidate the two cases. Concerns are mounting that the company's total debt to various creditors across all projects reaches hundreds of millions of shekels.
A.Sh. Yagel Yazamut u-Bniya, a developer from Netivot owned by Raanan Khalili (via Ofek Sheli) and Shlomo Avitan, was tasked with building a 220-apartment project in Be'er Sheva, including 102 units under the Mehir LeMishtaken framework. Creditors have filed a request for a temporary receiver, claiming an outstanding debt of 64 million shekels.
In April 2022, A.Sh. Yagel won an Israel Land Authority (ILA) tender for complex 61376 in the Ramot neighborhood, with a bid of 10,272 shekels per square meter (excluding VAT and indexation). The project is financed by Kwan Pitronot Mimun Ltd. and Sh. Shlomo Insurance Company Ltd. The project is currently at the building permit application stage.
"Real damage to the project's chances of coming to fruition"
The urgent request filed with the Tel Aviv District Court by the G. Kastenbaum & Co. law firm paints a grim picture. It describes a "real fear of damage or change in the state of the real estate, including the cancellation of the lease agreement with the ILA, given that there is no feasibility for completing construction by the company's January 2027 commitment date. Furthermore, neglect, dismantling, and destruction, combined with buyers losing patience and demanding the forfeiture of guarantees, will cause real damage to the project's chances of coming to fruition," the document states.
The request notes that some buyers have received refunds via insurance policies, and mentions a lawsuit filed by a couple who purchased an apartment in the project against Kwan, Sh. Shlomo, and the developer.
It is further claimed that current market conditions—including declining apartment prices and high interest rates—raise fears that even a full sale of the units would not cover the secured debt. The shareholder dispute continues to hinder management and project progress.
Finally, Mercantile Bank has filed its own receivership request regarding another of the company's projects, citing an alleged debt of approximately 181 million shekels. Estimates suggest the company has significant additional debts to Bank Leumi and Kobi Capital, with total liabilities reaching hundreds of millions of shekels.
Tel Aviv District Court Judge Iris Lushi-Abudi has ordered that the two receivership requests be handled comprehensively, pending responses from the company.
