Kohan Properties Controller Took $4.5 Million Against Manhattan Assets

Mike Kohan has been removed as CEO, president, and signatory of Kohan Properties, and as of yesterday, he is no longer a director. The reason for his latest departure emerged during checks for the refinancing of five Manhattan office buildings, whose rights were transferred to the company. In May, as part of an extension of a loan on these properties, Kohan obtained an additional $4.5 million from the lender. This sum was secured by the Manhattan assets, increasing the total secured debt on them from approximately $8 million to $12.5 million. The company only discovered this more than 50% increase in debt four months later. The board of directors has urgently ordered a review and is considering legal action, with the company stating it will update on the "return of the sum to the company," implying the money did not reach its coffers. Kohan resigned from the board at their request.

Concurrently, Assaf Ravid and his team have been appointed to assess the company's financial situation. The management is expected to present a business plan within weeks to improve the company's cash flow and its ability to meet its obligations. This latest revelation follows several others over the past six months. In March, the company raised 412 million shekels through bonds at a 7.75% interest rate. In July, it was revealed that Kohan had used approximately $9.6 million of company funds to repay loans on assets outside the company, leading the Israel Securities Authority to identify internal control failures. A broader review found this amount to be closer to $15.5 million. Kohan has since returned some of the money, with the remainder settled partly by transferring asset rights to the company.

In mid-September, further withdrawals of $2.7 million were exposed, along with tenant checks deposited into his private company accounts. This led the board to dismiss him as president and revoke his signatory authority. That same week, financial reports for 2025 were amended to reflect that liabilities to the controlling shareholder were recorded as supplier debt, investments and financing expenses were omitted, and there was no disclosure of loan covenant breaches, immediate repayment demands from lenders, or cross-collateralization with Kohan's private assets. The key question now is how much cash remains to service the bonds. Each new disclosure either adds debt or reduces collateral value, necessitating a clear picture for bondholders regarding cash on hand, debt per asset, financing costs, and actual cash flow. The bond is currently trading around 92.7 agorot, yielding about 11% to maturity, and has fallen approximately 3.1% this month. Currently, 136 mutual funds hold about 157 million shekels in the bond, with More leading at nearly 80 million shekels. The impact of the new loan on the June 30 financial statements is yet to be determined. Until the plan is ready, Ran Ben Daniel, the CFO who was also appointed CEO, is the sole authorized signatory for the company.