A Deep Dive into the Financial Crisis of Rom Kinneret
Financial Struggles Amidst Bankruptcy
Not long ago, real estate firm Rom Kinneret, announced bankruptcy, and now, the company is grappling with significant financial difficulties. The appointed trustees, lawyers Ehud Gindis and Shai Milu, recently submitted their first report to the Tel Aviv District Court. The report paints a bleak picture of the company’s financial health and presents a proposed work plan. There are genuine concerns regarding the hundreds of millions of shekels invested in the company, as well as the future of apartments bought in various projects.
A Search for Investors and Unfinished Projects
The Rom Kinneret owners reportedly reached out to investors in Dubai in hopes of selling one of the company’s assets in Bat Yam. This move was intended to bridge the cash flow gap, which resulted from a 137 million shekel debt. Regrettably, none of the company’s projects have reached completion, with some still in the early stages. The trustees’ report also highlighted problems with duplicate and conflicting transactions across all projects.
Shareholders Bearing the Brunt
The company’s shareholders, who invested their hard-earned money and dreams into purchasing a home, find themselves in a precarious situation. They are now dealing with a bankrupt company that, despite operating under the guise of a group purchasing organizer, functioned as a development company. This has left many of its shareholders in a financially strained position.
Suspicions of Fraud and Criminal Involvement
The trustees have raised concerns about possible fraud and criminal involvement connected with the company. The company’s owner, Ilan Sheshon, has left the country, and his responses regarding the company’s operations, conduct, and the reasons behind its collapse, are deemed partial and unreliable. Yehuda Sharon Samuel, the trustee of the purchasers’ money, appears to have severed all ties and allegedly left the country.
Proposed Alternatives for Existing Projects
The trustees have put forth two potential strategies for the existing projects: completion or sale and distribution. For instance, they are contemplating finding an alternative developer for a project on Hameorer Street in Givatayim. The new developer would complete the project and deliver the apartments to the buyers as promised.
Challenges Ahead and Future Prospects
However, major challenges lie ahead for all the projects detailed in the report. These include duplicate and conflicting transactions of buyers, and even suspicion of money disappearing from a trust account, which applies to several of the group’s projects. Despite these setbacks, the trustees are considering a plan to complete projects like the “Sea Tower 1” and “Sea Tower 2”. These projects aim to construct two residential buildings in Bat Yam’s Sea Park.
About Rom Kinneret
Since 1995, the Rom Kinneret Group has been active in the real estate field, specializing in organizing buying groups and urban renewal. The company also runs a project known as “Houses in Colors”, where it rents out offices and workspaces on a long-term basis in various cities across the country. These buildings are distinctive for their brightly colored facades.
It’s important to note that the presumption of innocence applies in this case. The allegations raised by the trustees are solely in the report, and all those involved are presumed innocent until proven guilty.
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