After Tel Aviv Magistrate’s Court issued a bankruptcy order against Nochi Dankner, the former tycoon is expected soon to leave his luxurious Herzliya villa and move into an apartment building in Tel Aviv. He has also recently started taking taxis as he adjusts to the new reality. In about a year and a half, when the law allows it, he plans to seek a discharge, a court order that can free a bankrupt debtor from remaining debts and allow a financial restart.
The order means Dankner will be barred from holding an Israeli passport, will be classified as a restricted bank customer, will not be allowed to use a credit card, and will be prohibited from founding a new company. He will be able to keep a bank account only if it remains in credit, and he must submit a monthly income-and-expenses report every two months to creditors. The court said collection through a supervised collective process, with a trustee appointed to his assets, is the best and proper way under the circumstances and will help all creditors recover what they can.
Dankner, who once controlled IDB, one of Israel’s largest conglomerates, fell into financial distress after a highly leveraged structure and a pyramid-like ownership model that let him control companies worth tens of billions of shekels with relatively little capital. The trustee for dealings with the banks and for selling assets will be appointed by the insolvency commissioner. The four creditor banks, Bank Leumi, Bank Hapoalim, Mizrahi-Tefahot Bank and Bank Discount, asked the court to open bankruptcy proceedings after Dankner stopped meeting his debt-settlement payments.
The banks’ petition was based on a debt of 550 million shekels, after Dankner had already repaid 110 million shekels and promised to transfer his share of his father’s estate. Dankner said he accepted defeat, telling the court, “I am throwing in the towel. I gave everything I had,” including pledging rights in his father’s estate, whose main asset is Beit Hayanan in Jerusalem, which he said he was negotiating to sell. His lawyer, Shuli Goldblatt, said at the start of the hearing that they would not oppose the banks’ request. Judge Nurit Tabib-Mizrachi heard the case, and Dankner said he had effectively been insolvent for 10 years and had done everything possible, including selling his home and relying on help from friends and relatives. He also said his attempt to restart in business through Hushen FoodTech failed because of a problem with an investor.
