End of the Heftiba saga? Settlement proposes ₪23.5 million for creditors and ₪9.5 million fee for special manager

Nearly two decades after its collapse, bondholders of Heftiba Jerusalem Gold are called to discuss a settlement that will pump millions into their coffers, but will also set an exceptional fee for the special manager, including a ₪4.75 million "effort bonus."

The bond trustees of Heftiba Jerusalem Gold, in liquidation since 2007, have convened a meeting to discuss a settlement with the special manager. On the agenda: distribution of additional dividends to creditors totaling a minimum of ₪23.5 million, alongside the approval of a final special manager fee of ₪9.5 million, conditioned on the success of the distribution.

The bond trustees of Heftiba Jerusalem Gold (in liquidation) have summoned bondholders to a consultation meeting to be held on October 8, 2026. On the agenda is a discussion on a draft settlement with the company's special manager, aimed at regulating the distribution of remaining funds in the liquidation coffers and setting the final fee for the manager, nearly two decades after the resounding collapse of the real estate group.

According to the draft settlement (Draft No. 20) presented to the holders, the special manager outlines a plan for distributing additional dividends to creditors in a cumulative amount of no less than ₪23.5 million. This sum, defined as a "fundamental condition" of the settlement, is expected to come from several sources: approximately ₪4.2 million will be released from cash reserves in the liquidation coffers, about ₪8.6 million will come from funds received from the "Freiman Cluster" asset and rental income, and the remainder, amounting to roughly ₪10.7 million to ₪12 million, will come from the collection of intercompany debts within the Heftiba group. To date, the cash balance in the liquidation coffers stands at approximately ₪20.2 million.

Conversely, the settlement seeks to set the final and full fee of the special manager at ₪9.5 million plus VAT. This payment is conditioned on the creditors actually receiving the full ₪23.5 million promised. The fee amount includes a component defined as an "effort bonus" of ₪4.75 million. Fee payments already made to the manager to date, totaling approximately ₪4.4 million (excluding fees regarding the banks' claim), will be deducted from the total amount. In addition, the settlement stipulates that if funds are received in the future from "potential sources" that are currently uncertain (such as assets in Poland or land in Jerusalem), the special manager will receive an additional fee of 17.5% of the dividends actually distributed from these sources.

喜び (The settlement details a tiered payment mechanism. Initially, upon the distribution of the 12th dividend to creditors (totaling at least ₪4.2 million from reserve funds), an interim fee of approximately ₪1.4 million will be paid to the special manager. Subsequently, upon the distribution of further dividends, 20% of the amounts distributed will be paid (up to a ceiling of ₪10 million), and thereafter 19.5%, until the full agreed fee of ₪9.5 million is completed.)

The proposed settlement comes after long years of liquidation proceedings. To date, debts in a nominal amount (as of August 2007) of approximately ₪124.6 million have been recognized for the company's creditors, out of which dividends totaling approximately ₪83.9 million have been distributed so far. The settlement also includes the payment of a supervision fee to the Official Receiver in the amount of ₪950,000. The upcoming meeting is for reporting and consultation only, without adopting decisions, but it constitutes a significant step toward the possible conclusion of one of the longest and most publicized liquidation proceedings in the Israeli capital market.