A fallen Israeli tycoon looks set to have around 92 percent of his NIS 1.7 billion ($480 million) debt to the banks and tax authorities written off as part of an agreement he reached over the weekend with a court-appointed administrator of his assets.
The deal, on which creditors will vote on Tuesday, will allow real estate mogul Eliezer Fishman — who also owns the Globes business daily and a major share in the mass circulation daily Yedioth Ahronoth — to start by repaying NIS 140 million ($39 million) and to buy back stock in two of his companies in five years for NIS 260 million ($73 million), which would then be transferred to creditors, the Haaretz newspaper reported Monday.
The agreement also allows for Fishman and his wife to remain in their palatial mansion in the luxury neighborhood of Savyon in central Israel for up to two years after the agreement goes into effect.
Fishman’s portfolio owed around NIS 4.5 billion ($1.3 billion) to some 10 creditors, Haaretz reported, of which Fishman had personally guaranteed around NIS 3.4 billion ($958 million). The figure of NIS 1.7 billion refers to the value of his combined collateral.
The story has exposed the extent to which Israel’s biggest banks, Bank Leumi and Bank Hapoalim, were willing to continue lending huge sums to the business tycoon for years on the basis of his promises to repay and despite his defaulting on existing loans.
Russian-born Fishman was brought down by the global financial crisis and by Russia’s recession, which decimated his businesses and investments.
In December, another Israeli tycoon, Nochi Dankner, was sentenced to two years in prison and fined NIS 800,000 (then nearly $200,000) for share price rigging prior to a stock price flotation for his holdings company IDB Group.
Last June saw the death from cancer of real estate mogul Motti Zisser, who had racked up NIS 2.5 billion ($705 million) of debt, of which NIS 1.8 billion ($507 million) was written off. Zisser was forced to give up control of holding company Elbit Imaging, of which he was the biggest shareholder.