A $30 million loan is tearing apart Arieli’s controlling partnership
Arieli’s three equal partners are divided over how to resolve the debt used to finance their acquisition of Elron. As Phoenix seeks buyers for the pledged shares, the dispute has escalated into accusations of betrayal and alleged threats.
A partner dispute at Arieli, the controlling shareholder of technology investment company Elron, has delayed an agreement with Phoenix Investment House that was supposed to be finalized on Tuesday. The dispute, involving Arieli's three equal partners, is one of the most serious partner conflicts to emerge in Israel's capital market in recent years.
Arieli acquired a 58.4% controlling stake in Elron from Discount Investments in September 2024 for $53 million. To finance the acquisition, Arieli received a NIS 90 million ($30 million) loan from Phoenix Investment House, secured by a pledge over its controlling stake in Elron.
As Calcalist previously revealed, Elron subsequently failed to meet the terms of the loan, prompting Phoenix Investment House to begin offering the pledged shares for sale. Elron is currently traded on the Tel Aviv Stock Exchange at a market value of about NIS 202 million ($67.3 million). At the time of the acquisition, the value of Arieli's stake was roughly twice the value of the loan.
As long as Elron's market value remained close to the level at which Arieli acquired control, there was little pressure on the loan. But the stock subsequently declined, falling 34% since the beginning of the year and reducing the value of the collateral.
Phoenix Investment House subsequently contacted Arieli and demanded that it either repay the loan or inject additional capital to reduce the loan-to-value ratio to a level that would comply with the loan covenants. Negotiations have been underway for the past two months, during which Arieli repeatedly indicated that it would refinance the loan. That refinancing, however, did not materialize.
Over the past two weeks, Phoenix Investment House began approaching various institutional investors and individuals with offers to sell the pledged shares, including at prices below the outstanding debt.
Against this backdrop, a dispute erupted between Arieli's partners Eric Bentov and Evan Renov and the company's third partner, Lisya Bahar Manoah, who also serves as chairman of Elron.
According to people familiar with the dispute, Bentov and Renov accused Bahar Manoah of opposing the settlement they had negotiated with Phoenix Investment House. They also alleged that she was seeking to sell the pledged shares to Phoenix at a low price, potentially allowing an investor connected to her to acquire the shares and subsequently sell them.
Bahar Manoah disputes the allegations. According to her account, after the dispute escalated, Bentov and Renov came to her home to speak with her, and she claims that a person acting on their behalf subsequently called and threatened her husband. Bahar Manoah filed a police complaint against her two partners, an unusual escalation in a dispute between business partners. As of yesterday, she had not withdrawn the complaint and continued to maintain that she and her family had been threatened by the two men.
The dispute between the partners remains unresolved. Bentov and Renov, for their part, view Bahar Manoah's actions as a betrayal, particularly after they brought her into the Elron investment and appointed her chairman.
Despite the conflict, Bentov and Renov managed to secure a NIS 20 million ($6.7 million) loan and inject the funds to help address the financing shortfall. As a result, an agreement with Phoenix Investment House was expected to be signed yesterday. Under the proposed arrangement, Phoenix would grant Arieli an additional month to repay the remaining balance of the loan. The NIS 20 million injection would reduce the loan-to-value ratio sufficiently for the loan to comply with the agreed covenants during that period.
Arieli Capital is a U.S.-based family office that manages capital for religious and ultra-Orthodox Jewish families in the New York area. The firm specializes in investments in technology and healthcare and was founded in 2016 by Bentov and Renov.
The two subsequently brought Bahar Manoah, then an investment manager at the Arieli Group, into the transaction to acquire control of Elron. Bahar Manoah previously worked as a mechanical and industrial engineer before joining Catalyst Investment Bank. She later became an investor specializing in defense technology and cybersecurity.
Elron is a publicly traded venture capital company with investments in 19 companies operating in cybersecurity, B2B software and medical devices.
All parties involved declined to comment.
