Michakashvilis buy historic Tel Aviv buildings for NIS 501m

The dispute in the Michakashvili family, which seemed to be over a year ago, still managed to persist for several more legal proceedings, but now looks finally over. Sources familiar with the situation tell “Globes” that the sale of dozens of the Michakshvili family properties in Tel Aviv and Herzliya, began in recent days, after a ruling by the Tel Aviv District court has ended the saga.

In September 2024, “Globes” reported that several properties belonging to the family were put up for sale after about 30 years of disputes over the inheritance of their father Aharon Yashar Michakshvili. The properties included the Ismailov Hotel on Yavne Street in Tel Aviv built in 1925 and Michakashvili House on Eilat Street, which was the first courthouse of the Tel Aviv District Court. The properties were sold in an auction conducted by the Mazor Hakim Beit Halachmi law firm, as part of a receivership and partnership dissolution process and by court decision.

Last September, it was reported that the properties were ultimately sold to the Michakashvili family. But it turns out that this was not the end of the story. The buyers (family members) objected to the receivers’ request for the sale in the Tel Aviv Family Court, after the sale had already been published in the media, and when the court rejected their request, they appealed to the Tel Aviv District Court.

Not liable to pay VAT

The petitioners had two main claims. Firstly that their offer of NIS 501 million excluding VAT, could have been lower if the receivers had not chosen to conduct the auction in the final stage using the ‘best and final offer’ method – asking bidders to submit an additional bid – the best they could offer. The petitioners claimed that if the receivers had conducted the procedure according to the normal bidding rules, they could have purchased the properties for NIS 477 million, since the other bidder, Union Live, submitted a bid for NIS 476 million.

Another main claim of the buyers was that they were not obligated to pay VAT on the purchase, and demanded that the sales agreements not be approved “until all necessary inquiries have been made with the VAT authorities and local authorities.” Both claims were rejected by the district court, although it was decided by the VAT authorities that the buyers are not liable to pay VAT. Thus the buyers will pay NIS 501 million, compared with NIS 591 million if they were liable to VAT.

The receivers had ordered an appraisal opinion from appraiser Dr. Assaf Gastfreund, who estimated that the value of the 10 properties in a quick sale is NIS 390.5 million, and NIS 459.5 million in the sale by a voluntary seller to a voluntary buyer.

In August 2024, according to the Family Court ruling, the buyers signed an offer to purchase all ten properties for NIS 318.5 million. During the bidding process, their first offer rose to NIS 465 million, and in the end the properties were sold to them for NIS 501 million – an amount more than NIS 40 million higher than the appraisal report.

Published by Globes, Israel business news – en.globes.co.il – on July 31, 2025.