The sudden collapse of summer camps company Simad Holdings, whose owners emptied it of its cash, struck investors in Tel Aviv with dismay. Towards the end of May, less than six months after it raised NIS 620 million in a bond offering in Tel Aviv, the company from New York was plunged into a debt crisis, in what is emerging as one of the fastest crashes in the history of the local stock market.
On the way to the severe irregularities that led to its fall, Simad leapfrogged without difficulty over a long series of watchdogs, won the confidence of some of Israel’s biggest investment managers, and left its local creditors in a hopeless situation.
Behind the swift downfall of Simad Holdings lie its owners, brothers Michael and David Shabsels. "Globes" traced the story of the fall of the brothers, well-known personalities in the Jewish community in New York, who were dubbed "summer camp kings." The two began in the magazines business, built a real estate empire, and won a reputation as generous donors. Beneath the surface, however, the brothers took on huge debts, estimated to amount to over $1 billion.
"You could make a movie out of this event," said one of the people close to the business of the collapsed company. "So many questions arise - how did the Shabsels brothers manage to operate in such a problematic way under the radar for so long? And how do you get to liabilities like these without anyone stopping for a moment?"
From a sports magazine to real estate
At the center of the Simad movie, which will presumably never be produced, stand the Shabsels brothers, Michael (56) and David (49), who grew up in the Park Slope neighborhood of Brooklyn and attended private schools there.
The brothers set up their first business venture when they were studying at university in the 1990s, born out of their love of sport in general and of basketball in particular. While he was studying economics at Brandeis University in Massachusetts, Michael Shabsels, the older of the two brothers, founded University Sports Publications, a publisher of sports magazines mainly about college teams.
According to its website, University Sports Publications grew into the leading publisher in its field, reaching over 800 colleges and universities in North America, and its magazines are considered "vital collectibles for each team's fans, whether students, alumni, staff or general public."
A few years later, the younger brother David joined the business, after completing art studies at Adelphi University in New York and at UMass Lowell. At that time, he devoted a large part of his time to college basketball, and even won a full scholarship.
Israeli Shahar Nahmias, who was studying for a degree in computer science at UMass Lowell, played basketball alongside David Shabsels. Nahmias, a member of Kibbutz Gadot who is the business manager of the kibbutz, was appointed by the Shabsels brothers as chairperson of Simad Holdings, which now places him in opposition to his old friend, demanding that he should meet his commitment to the Israeli bondholders.
As mentioned, at the end of his studies David Shabsles joined his older brother in the sport magazines business, which took off at that time and enjoyed high circulation. In 2009, the brothers sold their 50% holding in University Sports Publications for $37.5 million, capital that enabled them to turn to the summer camps and real estate businesses, through Damis Holdings (the company’s name is made up of the first letters of their names), which, like Simad Holdngs (the same name in reverse), has recently filed for bankruptcy in the US.
According to its website, Damis Holdings holds some 80 assets worth an aggerate $1 billion. Besides the thirty summer camps for Jewish children in the US (which are held under Simad Holdings), it owns commercial centers, offices, water parks, and hotels.
According to a source familiar with the details, the company is made up of a collection of dozens of privately-held companies, most of which manage a single asset. In total, the amount of real estate space it owns is huge, and includes some 1,800 multi-family rental housing units.
A complicated web of debts
On the Damis website, the Shabsels brothers describe themselves as "astute investors with a keen eye for opportunity" who "continuously seek out compelling investment opportunities." But under the polished surface and what looks like a prosperous real estate empire lies a complicated web of debts and mortgages, the first hint of which came last month. Its huge dimensions have steadily been revealed since then.
The Pandora’s box was opened in late May, as mentioned, when Simad Holdings’ Israeli board discovered that owner and CEO Michael Shabsels had taken $32 million (NIS 100 million) from the company without impediment and transferred it to his personal account.
This left Simad Holdings without enough cash to cover the interest payment to its bondholders at the beginning of June, as a result of which trading in its bonds on the Tel Aviv Stock Exchange was suspended and an investigation was opened by the Israel Securities Authority.
Within a short time it emerged that the debt to the Israeli bondholders was just the tip of the iceberg of the pile of debt that the brothers had accumulated through the companies they owned. This led Simad Holdings to seek Chapter 11 protection from its creditors, as is usual in bankruptcy proceedings in the US.
Alongside the suit filed by Simad Holdings’ Israeli creditors, whom the brothers owe some $210 million ($270 million including interest), similar suits were filed by additional creditors who had extended loans to the summer camps estimated to total more than $100 million.
In addition, dozens of privately-held companies owned by the Shabsels brothers also filed for Chapter 11 protection. According to the documents, the brothers privately own real estate assets (commercial, offices, and so on) on which they have liabilities of between $500 million and $1 billion.
What led to the snowballing of the brothers’ debt, according to sources familiar with the matter, was apparently merchant cash advance loans amounting to $140 million. Merchant cash advances (MCA) are an unregulated market in the US of quick, short-term loans, usually for up to two years.
"These are very expensive loans, usually taken by small businesses that have no access to the established banking system," a source familiar with the details explained. "These loans can even require weekly repayments, and the terms include personal guarantees and the payment of a percentage of the business’s cash and credit card income.
"Michael Shabsels took MCA loans of between half a million and a million dollars on dozens of assets, and the repayments reached the monstrous dimensions of over $200 million. He told the lenders that if necessary they could be repaid from the income of the summer camps."
"In order that the MCA lenders would not lay their hands on the summer camps income, Simad was forced to run to court and file a Chapter 11 petition. It’s bizarre how two separate law firms - of the bond trustee and of the company - didn’t see the records of the previous interconnected mortgages," sources close to the company said.
At the center of the claims over the collapse of Simad Holdings is the elder Shabsels brother, Michael, described by those who have met him as "a very sharp and charismatic man who gives the impression of being a very successful person." By contrast, his brother David is described as "sensitive and pleasant." An acquaintance of of the two told "Globes" that it was Michael who took the loans and the risks, and, as he put it, "not only harmed the investors, but also his younger brother."
People close to the two of them say that it could be that it was Michael’s ambitious nature that engendered the collapse. Evidence of that is a motivational video entitled "Business Resilience in Challenging Times" recorded and uploaded to YouTube in 2020, in which he says, "Anyone who is a business owner must always have the mindset that they are never going to fail and never going to give up no matter how bad business gets. The only thing worse than the business being bad is if you throw in the towel, and then for certain you’re done."
In recent years the Shabsels brothers have cultivated an image of philanthropists and community leaders. Michael and his wife Alyssa are members of the international board of United Hatzalah, and Michael is a member of the advisory board of the Olami organization which offers mentoring and networking for Jewish students in the US, while David is known as a benefactor of the Orthodox Union organization.
Two years ago, the brothers hosted an event for the Nevut organization, which supports IDF lone soldier veterans returning to the US in their transition to civilian life, at their summer camp at Westhampton in New York State. This image worked well on the underwriters and financial institutions in Israel. "They told us that they support IDF lone soldiers," a source who was present at one of the company’s meetings with financial institutions said.
A person who knows both of the brothers describes them as "family men who love reading, playing basketball, and watching movies," adding "These are very well-known people in the Jewish community in New York." A New York Jewish businessman says, "There’s almost no-one in the Orthodox and Reform community who doesn’t know their summer camps."
Separating land from the asset
As mentioned, behind the image of success and the generous donations, the way that the brothers ran their businesses was dubious. "They loved debt," a source who worked with the Shabsels family recently told US real estate website "The Real Deal," saying that they wanted as much leverage on their assets as possible.
In that article it was claimed that after they bought properties, the brothers separated the land from the asset in order to obtain mortgages on both parts, increasing the finance they received. Later they would lease out the land and the asset, which led to a series of lawsuits against them from their partners in some of the summer camps.
For example, in 2021, the partners in the Kiwi Country Day Camp in Westchester County (siblings Karla and Ivan Bellotto) sued the Shabsels brothers alleging that they were planning a hostile takeover and had acted to dilute their share of the partnership; had refinanced the asset and taken the proceeds for themselves; and had prevented access to the books. Similar claims were made in lawsuits filed by other partners of the brothers, in Camp Lavi in Pennsylvania.
This conduct, however, eluded the gaze of all the Israeli watchdogs, including the Israel Securities Authority, which raised no red flags, and rating agency Midroog, whose representatives visited Simad Holdings’ properties and went on to award the offered bonds a relatively high A3 rating. It also went unnoticed by investment houses More, Meitav, Yelin Lapidot, Finessa, Kabin, and Migdal Capital Markets, and by insurance company Harel, all of which bought the bonds that the company issued.
In the course of the offering, the Shabsels brothers came to Israel to meet the investment managers of the financial institutions. "The professionals claimed that all the background checks had been carried out and they came out clean. We have no way of checking independently. If it’s fraud and they concealed information, it’s very hard to know. We focused on trying to understand how the business itself worked," one senior manager who invested in the offering said.
Another investor who was present at one of the meetings said, however, "What they presented sounded very unrealistic, and so we didn’t participate in the offering. There’s no reason that companies that don’t receive credit in the US should obtain money from Israeli investors. There’s probably a reason why a bank located in the area where they work and that is familiar with the activity and the people says no to them. So we, who are thousands of kilometers away from their activities, should say ‘No problem, we’ll give you credit’?"
As far as is known, there is currently no contact between the Shabsels brothers and the Israeli creditors and board of directors. "At the beginning they spoke to them, but lately there has been complete break in relations," a source familiar with the details said.
Sources who were formerly in touch with the pair explain the reason for the breach. "The brothers were ousted from the company, their management powers were taken away from them, and an administrator was appointed by the court. Now no-one is talking to them, and there is nothing to be in touch about. They are no longer of interest to the management of the settlement, and from now on they will be dealt with on the legal and criminal plane."
"Globes" has not managed to obtain the response of the Shabsels brothers to the report.
Published by Globes, Israel business news - en.globes.co.il - on July 5, 2026.
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