Thousands of Jewish children are expected to attend summer camps owned by real estate brothers David and Michael Shabsels this year, despite the bankruptcy of their holding company, Simad Holdings.
A New Jersey bankruptcy judge has approved access to operating accounts for Simad’s 30 camps, allowing them to pay staff, suppliers and other expenses during the summer season.
The camps, most of which are in the northeastern United States, are expected to open as planned later this month.
The decision comes after Simad filed for Chapter 11 bankruptcy on June 4, just days after defaulting on its first bond payment to investors in Israel.
The brothers had raised about $195 million through a bond offering in December, secured by 13 camp properties, including Mohawk Day Camp, Camp Kiwi and Blue Star Camps.
A court-appointed restructuring officer, Assaf Ravid, now oversees the camps alongside local camp directors.
The Shabsels brothers own 22 overnight camps and eight day camps that serve around 20,000 children.
Camp leaders have attempted to reassure families that the bankruptcy will not affect this summer’s programmes.
Adam Wallach, director of Mohawk Day Camp, wrote to parents: “These are simply some behind-the-scenes matters that are being sorted out, but nothing that affects our campers, staff, or program.”
Court documents show the brothers listed more than $500 million in liabilities. An appraisal last year valued the camp portfolio at $466.6 million and projected strong returns. However, financial problems emerged in May when Simad disclosed that $34 million had been transferred to accounts controlled by the brothers.
After the company’s audit committee requested that the money be returned, the brothers initially agreed but days later said they were unable to do so.
The transfer prompted an investigation by Israeli securities authorities and led to trading in Simad’s bonds being suspended on the Tel Aviv Stock Exchange. The brothers have not been charged with any criminal offence.
Israeli news outlet TheMarker reported that the Israel Securities Authority could seek to extradite the brothers to Israel as part of its investigation - a step that would be unprecedented for the regulator.
Despite the crisis, Simad has told investors that it has received several approaches from investor groups interested in buying some or all of its assets.
According to the Foundation for Jewish Camp’s latest census, nearly 200,000 young people attended FJC-affiliated camps last summer, a record high.
Jamie Simon, chief executive of the Foundation for Jewish Camp, said: “There is a lot we don’t know about the camps affected, but what we do hope for is a positive resolution so campers and families aren’t impacted, since we know camp is so influential.”
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