Landowners Unilaterally Cancel Florentin Project Deal with Y-Box

Landowners in the coveted Gvulot compound in Tel Aviv's Florentin neighborhood have unilaterally canceled a combination agreement with real estate firm Y-Box, demanding offsets and refunds including at least 30 million shekels in agreed compensation, expenses, and financing costs.

The dramatic move marks a escalation in the ongoing legal dispute. Last August, the landowners filed a lawsuit in the Tel Aviv District Court demanding the enforcement of the agreement and the payment of urgent advances. Now, the owners have announced the complete cancellation of the contract and simultaneously filed an official request with the court to withdraw the original lawsuit. Under the contract, Y-Box acquired the land and was slated to provide the owners with 54% of the project's revenues, alongside a 140 million shekel advance.

According to the landowners, the cancellation stems from fundamental breaches by Y-Box, primarily the controlling shareholder's transaction to sell control of the company purportedly without obtaining the owners' consent. The original August lawsuit focused on other claims, including non-payment of advances, delays in obtaining building permits, and signing a bank financing agreement. The dispute has now escalated from pacing issues to full contract termination.

In a response issued to the Tel Aviv Stock Exchange, Y-Box management stated that it is reviewing the new legal documents but cautiously estimated that the chances of the contract being canceled alongside the claimed offsets are not high. However, the company admitted it cannot fully assess the financial impact of these developments. Last month, Gefen Residential and Urban Renewal, controlled by Tzachi Abo, announced an agreement to acquire nearly half of the controlling stake in Y-Box, a firm co-owned by Yitzhak Tshuva, for approximately 76 million shekels.