Businessman Ezra Ungar, who is reportedly negotiating a deal valued at approximately NIS 150 million to acquire control of Arkia Airlines, previously declared under oath in New York that he had no assets, cash or ability to obtain credit to pay a $500,000 penalty.
A source familiar with the proposed Arkia transaction told Ynet that Ungar is not expected to contribute his own money toward the acquisition. Instead, according to the source, he is serving as a conduit for funds being provided by other investors from the Chareidi community.
Ungar’s financial declaration emerged as part of a settlement with New York Attorney General Letitia James stemming from a real estate development in Williamsburg. Investigators found that Ungar sold 17 apartments in the project and collected approximately $6.7 million in deposits from purchasers without placing the money into escrow accounts as required.
James said the purchasers’ money was instead used to finance construction, leaving buyers without either their apartments or their money for years.
Under the settlement, developer Abraham Brach is expected to participate in providing financing and compensation to the affected purchasers. Ungar, meanwhile, will personally pay only $50,000 of a total $824,000 penalty after claiming that he lacked the financial means to pay the larger amount.
The agreement also bars Ungar from marketing apartments and securities in New York for six years.
The revelations come as Ungar pursues a potentially major transaction in Israel’s aviation industry. He is seeking to acquire the 72% stake in Arkia currently controlled by the Nakash brothers, with the proposed deal reportedly valued at roughly NIS 150 million.
One of the most controversial elements surrounding the prospective acquisition is Ungar’s intention to end Arkia flights on Shabbos and Yom Tov.
That proposal has generated fierce opposition from Arkia’s employees, who collectively own approximately 22% of the airline.
Arkia currently operates roughly 2,500 flights annually on Shabbos and Yom Tov, spread across approximately 70 days of operations each year.
The airline’s workers have already indicated that they intend to fight the sale if an agreement to halt flights on Shabbos and Yom Tov is made a condition of the transaction.
{Matzav.com}
