When IDB Group collapsed in 2013, controlling shareholder Nochi Dankner went from being one of the strongest businesspeople in the Israeli economy to a man mired in debt and eventually a convicted felon who sat in prison. He has now spoken in public about his life and economic situation for the first time. The renowned tycoon appeared in the Tel Aviv District Court and spoke about everything, or almost everything. The reason: Dankner is determined to fight the foreclosures imposed on his assets, which threaten his chances of paying off the enormous debts he owes, totaling hundreds of millions of shekels.
Dankner, who turned 70 last November, took an active part in the hearing, while sitting in the front row of the courtroom, answering questions himself and occasionally adding to what his lawyers said. Accompanied by his son-in-law, Tal Englander, Dankner, as always, remained smiling style and conveyed a 'business as usual' manner as he tried to persuade Judge Sigal Yakobi of the enormous damage if the foreclosures imposed on his share of the inheritance he received from his father, the late businessman Yitzhak Dankner, and on his holdings in the foodtech company he founded, Hoshen, are not lifted - a company to which he currently devotes "80%-90% of his time," he said.
Class action and foreclosures
The damage that Dankner fears stems from the negotiations he is currently conducting with the banks to recycle the remaining debts he owes them, amounting to some NIS 400 million. The foreclosures are affecting these negotiations. Adv. Shirley Ifrach-Azor of Lipa Meir law firm, who represents Dankner against the banks, warned, "Clearly the banks will not sit idly by if foreclosures are imposed. They will also act and seek to impose foreclosures and immediate repayment of the entire remaining debt."
The foreclosures imposed on Dankner are after a NIS 50 million class action suit was approved against him and capital market figure Itay Strum. The lawsuit was filed by former IDB shareholder Aryeh Rahav, over the two men's involvement in IDB's "members' offering." In that 2012 affair, IDB raised NIS 321 million from businessmen close to Dankner, including Zvika Livnat, Avi Fischer, Yitzhak Manor, Shlomo Eliyahu, Michael and Raya Strauss, Ofer Nimrodi, Yair Hamburger, and Ilan Ben Dov. Dankner and Strum were later convicted of stock dumping intended to increase demand for the offering. Now come the civil proceedings in the form of the class action lawsuit filed by Rahav. The foreclosures seek to ensure that Dankner will meet the payments that might be ordered against him in the class action.
12 years of repaying debts
Meanwhile, Dankner emerged satisfied from last week's court hearing. The judge decided to reduce the foreclosures on his assets from NIS 50 million to NIS 20 million, and ruled that she may later remove them from his father's estate, leaving only those imposed on Dankner's holdings in the Hoshen company. This is a critical development for Dankner, as the estate is the central component in the negotiations he is conducting with the banks to redistribute the balance of his debt. But the road ahead is still long.
Dankner has not appeared in court much in recent years. At least not since the Supreme Court rejected his appeal against the conviction for the stock issue in 2018 and sentenced him to three years in prison. Dankner eventually served 16 months in February 2020 was released from Ma'ashiyahu Prison in Ramla.
During those difficult years, Dankner also managed to sell the family house in Herzliya Pituah (the proceeds were transferred to the creditor banks), and move to another house in the city. When Adv. Ifrach-Azor noted in court that Dankner had been paying off debts for 10 years, he corrected her to "12 years." Ahead of the hearing, Dankner sounded hurt. In an affidavit he submitted to the court, he wrote "There is no basis for the unfounded attempt to 'portray' me as someone who did not meet his obligations. I have been working and doing my best for about a decade to pay off all my debts."
During the hearing, Dankner was pleased with Judge Yakovi, who expressed appreciation for the amounts he had repaid so far. In his affidavit, he wrote: "I managed to do this as a result of the tremendous efforts I made during this period to meet my obligations. Among other things, I received financial assistance from my late father, I sold my and my wife's family home, and I sold real estate that was given to me as a gift from my mother, and I received financial help from family and friends."
Nearly ten years have passed since Dankner first signed a debt settlement with the banks, which provided loans worth millions of shekels to the two private companies through which he controlled publicly-traded IDB Development. The original debt settlement with the banks was signed in 2016, when Dankner undertook to repay the enormous debt of NIS 510 million to Bank Hapoalim, Leumi, Discount, Mizrahi-Tefahot, Credit Suisse and Union Bank. Dankner was supposed to repay NIS 180 million in the first eight years of the settlement, and the rest of the debt from most of his future income, without a fixed period of time.
Dankner detailed to the court for the first time, the amounts he has repaid so far - and those still owed. And future debt is large. Nine years later, Dankner has repaid NIS 103 million, a considerable sum, but one that constitutes only about 20% of the NIS 500 million, he pledged to repay the banks.
A complex family situation
The money Dankner received from his father, who died in 2023, is the main source of repayments so far - and also for his ability to repay the remaining debt. At the center of the talks he is conducting with the banks are his rights in his father's estate. Hence the fear of foreclosures on the estate.
During the hearing, Dankner said that he expects to receive at least NIS 100 million from his father Yitzhak's inheritance, which mainly includes real estate assets. Of this amount, he plans to transfer about NIS 90 million to the banks, which also reflects the interest accrued on the debt. This is the remaining amount he has left to pay on the first part of the debt settlement.
Dankner shared with the court that the real estate assets in the estate, of which he is one of the managers, need to be improved. When an asset is realized, the money goes into the estate's coffers, and is divided among the heirs. In this regard, Dankner said that his father's will explicitly states that the money must first be divided among nine other heirs (presumably the third generation), before Dankner and his sister Shelly Bergman receive their share of the remaining inheritance.
These things may shed light on the complex situation that Dankner is facing with regard to the balance of power in his family, and their impact on his debts. In this context, a settlement in the class action lawsuit filed against him was recently canceled after Dankner failed to meet one of its conditions when he did not post a guarantee from his brother-in-law - businessman Ido Bergman, who is married to Dankner's sister. "I was convinced in good faith that the guarantor (Bergman) would sign the guarantee when the time came, but unfortunately, over time, circumstances changed and the guarantee was not given," Dankner explained. As a result, the settlement was canceled. "Contrary to the attempt to blacken my name, I was interested in the settlement agreement," he stated.
Food-tech
The court proceedings also revealed Dankner's main occupation since his release from prison, which he is counting on as an additional source of debt repayment - Hoshen FoodTech, which Dankner founded with his father in 2020.
The company has developed technology for cultivating sprouts for animal fodder, and built a factory with Kibbutz Saar near Nahariya. Dankner serves as the company's chairman and CEO. His son-in-law Englander, who accompanied Dankner in previous business ventures, also works with him in the new business.
Dankner and his father invested about NIS 15 million in the company, and since September 2024 it has raised about $2.7 million from investors at a valuation of $40 million, before money. Dankner has big plans for Hoshen: building more factories in Israel and expanding operations abroad. In the court hearing, he said, "Good value has been created in it." According to him, the company is worth about NIS 100 million (he holds a 63% stake).
Will that be enough to repay his huge debts? "Hoshen FoodTech seems a very impressive business, but I don't know yet about the value of this company," said Judge Yakobi - and sent the parties to coordinate between them on undertaking a valuation. At this stage, there is only a low chance that Dankner and his lawyers, Nir Cohen, Amir Ben-Artzi and Shirel Shukrun, will reach agreements with the plaintiff Rahav and his lawyers, Elias and Ron Haimovich, on the value of Hoshen. The continuation of discussions on the matter is planned to take place after Passover.
Full disclosure: Globes is a customer of the Bar distribution company owned by Ido Bergman, Nochi Dankner's brother-in-law
Published by Globes, Israel business news - en.globes.co.il - on April 15, 2025.
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