From Israel’s most powerful businessman to bankruptcy proceedings
Nochi Dankner faces insolvency restrictions and the court-appointed sale of inherited assets.
After the Tel Aviv Magistrate’s Court issued an insolvency order against him on Wednesday, Nochi Dankner is expected to soon move from his luxury home in Herzliya to an apartment building in Tel Aviv. He has also recently begun using taxis, as he prepares for a dramatically different lifestyle. As far as is known, Dankner intends to apply for a discharge in about a year and a half, when eligible, a legal order that would allow him to be released from the remainder of his debts and begin a new financial chapter.
Dankner, who is now effectively considered bankrupt, will be barred from holding an Israeli passport, classified as a restricted bank customer, prohibited from holding credit cards, and prevented from establishing a new corporation. He will be permitted to maintain a bank account only with a positive balance and will be required to submit reports on his income and expenses to creditors every two months.
The Tel Aviv Magistrate’s Court issued the order after Dankner withdrew his opposition to the bankruptcy proceedings initiated by his creditor banks. “The collection of Dankner’s debts through a supervised collective proceeding, administered by a trustee appointed over his assets, is the best and most appropriate course of action under the circumstances. It will benefit all creditors and assist in repaying his debts,” the court ruled.
Dankner, who once controlled the IDB conglomerate, the largest business group in the Israeli economy, was forced into a debt settlement after years of heavy leverage and the collapse of the pyramid structure through which he controlled companies worth tens of billions of shekels with relatively little equity.
The trustee responsible for managing Dankner’s remaining debts and liquidating his assets will be appointed by the Insolvency Commissioner. The proceedings stem from debts of approximately NIS 550 million owed to four creditor banks. Dankner has already repaid around NIS 110 million and pledged to transfer his share of his father’s estate to the banks as well.
According to people familiar with the matter, Dankner repaid more than NIS 100 million to the banks despite objections from some close friends and family members, who believed there was little point in making additional payments given the likelihood of bankruptcy proceedings.
The banks’ decision to seek insolvency proceedings was reportedly driven by frustration over what they viewed as insufficient efforts by Dankner to sell the Ivory House, an office building in Jerusalem that he inherited from his father, Yitzhak Dankner. The sale is now expected to be handled by a court-appointed trustee, who will oversee the process and transfer proceeds to creditors, effectively removing control from Dankner.
“I Give Up”
Dankner did not oppose the banks’ request and told the court: “I’m giving up. I’ve given everything I have, including a mortgage on my rights in my father’s estate, whose main asset is the Ivory House in Jerusalem, and I am negotiating its sale with a buyer.”
At the beginning of the hearing, Dankner’s attorney, Shuli Goldblatt, informed the court that his client would not contest the banks’ request. The hearing was presided over by Judge Nurit Tabib-Mizrahi.
“I have effectively been insolvent for ten years,” Dankner told the court. “I did everything I could, including selling my home and receiving financial assistance from friends and relatives.”
The four creditor banks, Bank Leumi, Bank Hapoalim, Mizrahi Tefahot Bank, and Israel Discount Bank, sought to initiate insolvency proceedings after Dankner failed to meet debt settlement payments in recent months.
Out of a debt of approximately NIS 180 million covered by the settlement arrangement, Dankner repaid around NIS 110 million. His attempt to launch an independent venture through Hoshen FoodTech ultimately failed, he said, after an investor withdrew from the project.
