Summer Camp Kings’ Debt Scandal Shocks Tel Aviv Investors After Simad Holdings Collapse

Simad Holdings, a summer camp company owned by New York-based brothers Michael and David Shabsales, abruptly collapsed in late May less than six months after raising 620 million shekels in a bond offering on the Tel Aviv Stock Exchange. The company’s sudden debt crisis is among the fastest collapses in the local market’s history, leaving Israeli investors stunned and creditors facing heavy losses.

The Shabsales brothers, known as the "Kings of Summer Camps" in the Jewish community, built their empire from sports magazines to real estate and summer camps for Jewish youth in the U.S. Despite a philanthropic image and ties to Jewish organizations, the brothers amassed over a billion dollars in complex debts. The crisis erupted when Michael Shabsales withdrew $32 million from Simad’s cash reserves to his personal accounts, causing the company to miss bond interest payments and triggering a trading suspension and Securities Authority investigation.

Simad’s debt to Israeli bondholders alone totals about $210 million, with additional loans exceeding $100 million from other creditors. The brothers’ holding company, Damis Holdings, owns around 80 properties valued at roughly $1 billion, including camps, commercial centers, offices, water parks, and hotels. Much of the debt stems from high-cost Merchant Cash Advance loans totaling approximately $140 million, which require frequent repayments and personal guarantees.

The brothers’ management style involved separating land ownership from properties to maximize financing, leading to legal disputes with partners accusing them of hostile takeovers and financial manipulation. Despite warnings and red flags, Israeli regulators, rating agencies, and institutional investors, including major investment houses and insurance companies, did not detect the financial risks before the bond issuance.

Currently, the Shabsales brothers have been removed from management, with court-appointed trustees overseeing restructuring efforts. Creditors are cautiously optimistic that if the summer camps operate through the season, the business’s active value could help recover much of the debt. However, ongoing legal and financial proceedings will determine the final outcome. The brothers have not responded to requests for comment.

Summary: Simad Holdings, owned by Michael and David Shabsales, collapsed suddenly after misappropriating funds, leaving Israeli investors exposed to over $200 million in debt. The brothers’ complex real estate and summer camp empire is now under court supervision, with creditors hoping to salvage value from ongoing operations.

Points: - Simad Holdings collapsed months after raising 620 million shekels in Tel Aviv bond offering. - Owners Michael and David Shabsales withdrew $32 million from company funds to personal accounts. - Company debt exceeds $210 million to Israeli bondholders, plus over $100 million from other creditors. - High-cost Merchant Cash Advance loans of about $140 million worsened financial strain. - Legal disputes and opaque management practices preceded the collapse. - Court-appointed trustees now manage restructuring; creditors hope summer camps’ operation aids recovery.

Topic: economy

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