Cohan Properties Scandal Deepens as US Investors Claim Pledged Asset Rights
US investors claim rights over assets pledged to bondholders in the Cohan Properties scandal, alleging former chief Mike Cohan unauthorized mortgages.
A fresh escalation has hit the Cohan Properties scandal as US-based investors claim ownership rights over real estate assets that were pledged as collateral to bondholders. Former controlling shareholder Mike Cohan allegedly concealed this ownership and mortgaged the properties without their consent. The group of approximately 70 American investors, primarily from Long Island, New York, invested roughly $200 million in Cohan's real estate assets. These properties were transferred to a British Virgin Islands (BVI) company established for a 412 million NIS bond issuance in Tel Aviv earlier this year.
Invalid Pledges and Discrepancies
In a letter sent through attorneys Ori Gaon, Yair Leibovitz, and Yaniv Azran from the S. Horowitz & Co. law firm, the US investors argue that the liens registered in favor of the Israeli bondholders are invalid. They maintain that the pledges were executed without authorization and directly violate their property rights. Concurrently, Cohan Properties reported similar claims from other investors regarding a separate asset pledged to bondholders. While the prospectus stated that Cohan owned 100% of the holding company, the investors claim they hold a 54% stake, leaving Cohan with only 46%, rendering the recent refinancing and pledging actions unauthorized.
Corporate Takeover and Legal Battles
Cohan Properties stated it is reviewing the allegations based on data previously provided by Cohan. Meanwhile, the company revealed further discrepancies, including a $4.5 million loan that Cohan claimed to have extended, which the lender stated has been in default since April. Earlier this month, Amos Luzon's Luzon Group and Oren Halfon's Alpha Hedging took control of Cohan Properties in a 60-40 split for $6.4 million (approximately 19.5 million NIS). This takeover occurred after Cohan defaulted on a $4 million loan from Dekma Finance, leading to the execution of his company shares as collateral. Amos Luzon was appointed chairman, while Cohan is contesting the change of control through legal proceedings in the British Virgin Islands.
