The battle for "Ir Kinneret" heats up: Landowners threaten to sue "Av-Gad" directors personally
The conflict surrounding the "Ir Kinneret" mega-project in Tiberias is escalating. Landowners are threatening to sue Av-Gad directors personally, claiming they approved the project without financial backing.
The conflict surrounding the "Ir Kinneret" mega-project in Tiberias is escalating. After the landowners filed a lawsuit in June against Av-Gad and its subsidiary Av-Gad Kinneret, they are now threatening to take action against the directors personally, claiming they approved the project's engagement, which involved billions of shekels, even though the company, according to them, lacked the financial capacity to implement it. Av-Gad responds that this is an improper attempt to exert pressure on the directors and even warns that the landowners' conduct itself may create personal liability for the parties involved on their behalf.
Ir Kinneret was supposed to be one of the most ambitious projects of Av-Gad, a company whose main activity is urban renewal in the center of the country. The company entered the project in early 2023 together with the landowners in the area, led by Zohar Oved. The full plan includes seven hotels, about 1,000 guest rooms, a congress center, about 21,000 square meters of commercial space, and 500 apartments. The project cost was estimated at about 3 billion shekels.
Av-Gad, owned by the Ratzon family, even sought to list the shares of the subsidiary responsible for initiating the project on the stock exchange at a valuation of about 100 million shekels. However, operational difficulties began to surface in the Kinneret project, along with disputes with the landowners, and consequently, the subsidiary's IPO was canceled. In February 2026, the owners announced the cancellation of the agreements, and in June, the landowners filed a lawsuit for 20.5 million shekels, along with a demand to allow them to advance the project without Av-Gad.
However, it has now been revealed that beyond the lawsuit against the company, eight companies holding the land sent a warning letter earlier this month through attorneys Gilad Wexelman and Racheli Peri Richman from the Herzog Fox Neeman firm, against the directors of the public company Av-Gad. This was done with a warning that they would be sued for their liability. Among the landholders is Zohar Oved, former mayor of Tiberias. The letter was sent personally to six directors: Av-Gad Chairman Michael Ratzon (0.3%), his son, controlling shareholder and CEO Raam Ratzon (50.5%), Amit Geller, external directors Ezra Bar Yosef and Tal Yaron-Eldar, and independent director Shlomo Ratzbi.
The landowners claim that Av-Gad committed to providing them with a loan of up to 60 million shekels and to ensure the financing of the project, the scope of which was estimated at about 2 billion shekels. They claim that the directors approved the deal when they knew, or should have known, that the company was unable to finance it. They argue that attempts to obtain bank and non-bank financing did not materialize and that the attempt to list Av-Gad Kinneret also failed.
At the same time, it was revealed that the Securities Authority rejected a valuation that Av-Gad sought to attach to the Av-Gad Kinneret prospectus draft, in which the subsidiary was valued at hundreds of millions of shekels. The Authority found that some of the assumptions on which the valuation was based did not match the state of the project and its business environment, and the valuation was removed. The landowners claim that the company continues to hold cautionary notes on the land and thus holds, in their words, the project "hostage," even though they claim it has no ability to finance it.
The matter of the letter regarding the directors' liability for the stagnation of the Kinneret project was not reported to investors. However, on August 16, the response from the Av-Gad directors arrived. Attorneys Hedva Hess-Kibash and Barak Kainan from the Piron firm, representing the directors and the companies, rejected the claims completely and argued that the landowners have no cause for a personal lawsuit against the directors. According to them, the engagement was made with Av-Gad Kinneret and not with the directors, and the personal approach to them is an "improper tactical move" intended to create leverage. Av-Gad company stated that the lawsuit filed by the landowners was reported in detail at the time of its filing. Nevertheless, according to legal advice received by the company regarding the additional letter, there is no cause of action against the directors, and in practice, none has been filed, so it is a letter whose sole purpose is harassment and a vain attempt to intimidate.
