Kohan Properties Founder Took $4.5 Million Loan Against Manhattan Assets

Mike Kohan has been removed as CEO, president, and signatory, and as of yesterday, he is no longer a director at Kohan Properties. The reason for his latest departure was revealed as part of a refinancing process for five Manhattan office buildings. It was discovered that in May, as an extension of a loan on these properties, Kohan obtained an additional $4.5 million from the lender. This sum was secured by a lien on the Manhattan assets, increasing the total secured debt on them from approximately $8 million to $12.5 million. The company only learned of this significant increase, over 50%, four months later.

The board of directors has urgently ordered a review of the situation and is considering legal action. The company stated it would provide updates regarding the "return of the sum to the company," implying the funds did not reach the company's coffers. Kohan resigned from the board at the directors' request. Concurrently, Assaf Ravid and his team have been appointed to assess the company's financial standing. 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 a series of disclosures over the past six months. In March, the company raised 412 million shekels through bonds with 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 later increased this amount to about $15.5 million. Kohan returned some of the money, and the remainder was settled partly by transferring asset rights to the company.

In mid-September, further withdrawals of $2.7 million and tenant checks deposited into his private company accounts were exposed. The board then removed him as president and revoked his signatory authority. That same week, financial reports for 2025 were amended to reflect that liabilities to the controlling shareholder were recorded as supplier debts, investments and financing expenses were not recorded, and there was no disclosure of loan covenant breaches, immediate repayment demands from lenders, or cross-collateralization with Kohan's private assets.

The crucial question for Ravid's plan is how much remains to service the company's bonds. Each new disclosure adds to the debt or diminishes collateral value, necessitating a clear picture for bondholders: current cash reserves, debt per asset, financing costs, and actual cash flow generated. The company's bond is currently trading around 92.7 agorot, yielding approximately 11% to maturity, and has fallen about 3.1% this month. As of now, Ran Ben Daniel, the CFO who was also appointed CEO, is the sole authorized signatory for the company.