The Marker, Adi Cohen, 17.02.2020

Ramot Shavei Zion and Netanel Group and Neot Mizrachi of Mizrahi Group & Sons Investments, which joined together for the project - returned from bids for the construction of 148 apartments in Bat Yam a few days after it closed, and are expected to now pay compensation of NIS 33 million together to landowners - A petition filed in Tel Aviv Magistrate's Court earlier this month by Yigal Doron, the pitcher's receiver.

This is a 6-acre plot of land in the Yam Park neighborhood in southwest Bat Yam, which was estimated at an estimate of NIS 140 million. In a stubborn competition process between the two - the companies, both of which also have rights in the field - raised the proceeds on the ground to NIS 166 million.

In the application, Doron claimed that Ramot Shavei Zion, which won the tender last month with a bid of NIS 166 million, did not sign the sales agreement in time and as required and did not complete the required bank guarantee payment - thus violating the terms of the tender. As for Mizrahi and Nathaniel Group, who were the next bidders, Doron argued in his appeal that they also breached the contract for the same reasons.

In response, and exceptionally, Doron demanded from the court that the companies should not be allowed to re-tender for the lot or participate in its purchase, as well as to keep their bank guarantees paid - in the amount of NIS 16.5 million each. This is as agreed compensation to the landowners - at least until the damage caused by the breach of the tender becomes clear.

Attorney Roy Hecht, head of the real estate department at the Shavit Bar-On-Galon Zin Vitcon & Co. office, explains, "As a general rule, the purpose of the real estate receiver, above all, is to accept a well-established offer that can be executed in a sale agreement and provide the best value for the landowner. Recently, the Supreme Court (Magic Sunrise Hotel) ruled that the rule by which a sale of a property is convened by way of competition is at the discretion of the receiver, and in some cases the competition may be waived in order to obtain a higher price for the property. There is also flexibility in sales procedures under the convening of assets, and in the present case, the bidders seem to believe that After winning, they will be given a few weeks to talk to other landowners and to complete more combination deals. However, if some bidders would address this issue to the property or court and submit their bids in advance, they may have considered submitting this request in the affirmative. "

"The company in retrospect felt it was too reckless"

Doron was appointed as part of the disassembly of many rights holders in the land, while Neot Mizrahi filed a joint dissolution claim through Attorney Tal Kenneth, and most of the private rights represented Attorney Moran Tal from Moshe Shorer and Aviad again from Shaw & Co..

The competition process - which was set in the NIS 140 million initial entry price assessor's opinion - included Ramot in the city, Shafir Engineering, and the pair of companies Naot Mizrahi and Nathaniel, who cooperated in favor of the tender. At the end of the procedure, on January 12, Ramot Company's offer was won - totaling NIS 166 million. After that, Neot Mizrahi and Netanel with a bid of NIS 165 million, and Shafir Engineering - with a bid of NIS 145 million.

Subject to the tender contract, at the start of the competition process, the companies deposited a bank guarantee of 10% of the prescribed entry price - NIS 14 million for each. Alongside this, the companies have pledged that in the event that their offer wins the competition - within 24 hours they will complete the bank guarantee deposited at about 10% of the bid price submitted - and not the initial pricing.

However, about a week after Ramot's win was announced in the city, and despite a series of warnings about its cancellation, the company did not complete the remainder of the bank guarantee. In response, and with the approval of the Tel Aviv Magistrate's Court, the receiver ordered the cancellation of the company's offer, transfer of the winnings to Neot Mizrahi and Nathaniel - and forfeiture of NIS 1 million of the bail money paid - the total difference between the winning bid as a "for breach".

On January 23, following the cancellation directive, Ramot City of the Securities and Exchange Commission reported the decision, claiming that the reason for not completing the auction agreement was the refusal of the property to give it time to negotiate with the landowners. "We also note that the company already owns about a third of the rights in the lot," the report said.

It was also noted that "as is customary for such transactions, immediately after the Company was declared a winner, the Company sought a length of the property voucher to sign the sale agreement to enable it to sign combination agreements with third parties holding various portions of interest therein. The Voters refused to provide that length." .

The property receiver's letter to the court noted that "the lack of good faith in the city levels is clear ... Apparently, (the company) later felt that it was too reckless in submitting its offer and may not have the funding needed to do so (which is perhaps why it was extended) Of a month to negotiate with landowners, presumably to contract them in combination deals and reduce the financial charge they will have to pay) ... As for Neot Mizrachi and Nathaniel, these are dependent on excuses from different excuses but have no explanation why two reputable construction companies are returning They have a clear commitment that they have, so they have no justification for refusing to sign, except that they seek to seize the opportunity and Reduce the price they pay. "

Ronnie Mizrahi, chairman of Neot Mizrahi, told TheMarker that "as soon as the receiver declared another winner, the terms of the auction changed. For me, I told the realtor that I was ready to buy the deal if it decided on the terms of the auction 10% to Levi Shavei Zion - and I would complete the balance and buy the lot. It did not happen. The one who is now coming and telling me that I will not be allowed to participate in a new tender - this is nonsense. No one in Israel can deny me my right to participate in a tender on a plot that I am part of. And if I happen to avoid it - I have six more companies, and another company will participate. "

Netanel commented: "The conduct of the Knesset is puzzling and raises questions. The attempt to compel Netanel in its bid, after capturing their winnings from competing on the land in question, is not grounded in the Israeli Land Authority's rules and is not the authority of the Knesset. Netanel believes that this conduct is inconsistent with the principle of good faith and we are confident that this will also be the court's conclusion. "

Ramot Shavei Zion has not commented.