Value Base vs. Aya New York: Investment bank sues for 11 million shekels in unpaid commissions

Six months after leading its bond offering, the investment bank Value Base has filed a lawsuit against the BVI-based company Aya New York and its controlling shareholder, Amir Shariki, alleging that the company failed to pay all contractually obligated commissions. In response, Aya New York has rejected the accusations and is demanding compensation from Value Base for damages caused to the firm.

In the lawsuit filed yesterday with the Tel Aviv District Court, Value Base, managed by Ido Neuberger, claims that Aya New York breached its obligations to pay for consulting and distribution services provided during the Series A bond offering earlier this year.

Value Base has set the total claim at approximately 11 million shekels, broken down as follows:

• About 8 million shekels in unpaid offering commissions

• About 2.5 million shekels for damages, including "reputational damage"

• About 500,000 shekels for "unjust enrichment"

In a report to the stock exchange, Aya rejected these claims, stating that the commission amount Value Base was entitled to stands at 5.3 million shekels. The company claimed it attempted to transfer this amount via the offering coordinator upon completion of the process, but the bank refused to accept it.

Regarding the additional commissions demanded, Aya maintains that these involve success fees payable solely at the company's discretion. Furthermore, Aya argues that Value Base is not entitled to commissions on bonds purchased by the controlling shareholder or those not distributed by the bank.

Attorney Michael Vaknin of the MOi firm, representing Aya New York, stated:

"It is regrettable that an underwriting company chooses to act this way against a recent client, exerting improper pressure while attempting to harm its reputation among investors. This is an extremely unusual and unacceptable move that should serve as a warning. A substantial part of the lawsuit concerns an unprecedented demand for commission on amounts invested by the controlling shareholder, as well as demands for payments never anchored in the signed agreement."

Raising 295 million shekels in Tel Aviv

The lawsuit follows Aya New York’s successful 295 million shekel bond offering earlier this year, which carried an annual interest rate of 7.7%. The company, controlled by former Israeli businessman Amir Shariki, was incorporated in the British Virgin Islands to hold five income-generating assets in Manhattan as part of its debt-raising strategy in Israel.

Aya New York focuses on income-generating real estate, holding five assets with a total value of approximately 272 million dollars (of which the company's share is 156 million dollars). The company states it has been actively improving these assets since their acquisition over the past two years.

To secure the offering, the company pledged two assets worth approximately 137 million dollars: the Riverside residential project (233 rental apartments, 94% occupancy) and the Renoir residential asset (151 units with similar occupancy).