Nochi Dankner, who has personal debts of 480 million shekels ($129 million) to pay off after losing control of the IDB Holding Group, was seen over the weekend boarding a business-class flight on United Airlines to New York.

Flying business class, which costs about $5,500, is further evidence that 10 months after losing control of IDB, Dankner leads a luxury lifestyle that includes retaining a 40-million-shekel home in Herzliya Pituach.

Bankers say that in the context of negotiations with them over the debt, Dankner has committed himself to a more modest lifestyle and to maintaining a low profile so as not to arouse a public storm over the agreement they finally reach.

While spokesman for two of his biggest creditors – Bank Hapoalim and Bank Leumi – declined to comment, bankers said for background on Sunday that flying business class violated their understanding.

A spokesman for Dankner denied there was anything inappropriate in flying business class and that his ticket was paid for by the group that had invited him to New York.

“Nochi Dankner’s business activities are all conducted first and foremost to enable him to make debt payments to the banks,” the statement said. “Nochi went overseas yesterday, together with other business people, as part of a project to provide buwiness consulting overseas.”

Bankers say they wanted to get in writing a commitment from the former tycoon that he would do nothing to embarrass them, for instance moving into a luxury home registered under the name of someone else in his family, after signing the agreement. However, after discussions on the matter they failed to reach a formal understanding on terms that would preclude a public row, and instead settled for an oral commitment.

The photos of Dankner in business class, however, now threaten to put any kind of agreement in jeopardy because of concerns over the public’s reaction. In any case, an investigation by bankers has concluded that Dankner has few assets left and that he has not hidden money in overseas bank accounts.

Except for his $11 million villa, he's broke

The one significant asset he has left is the Herzliya Pituach villa where he now lives – and half the ownership of that he transferred to his wife just before he lost control of IDB.

Under the terms of the debt agreement the two sides are negotiating, Danker would be committed to repaying 180 milion shekels of the 480 million he owes within eight years. Bankers are counting on Dankner’s father, Yitzhak, to provide the money. Either way, Dankner has provided no guarantees to the banks, which means the banks have no way of collecting on the debt apart from forcing him to declare bankruptcy.

The remaining 300 million shekels of debt will only be repaid if he has sufficient income – that is, 60% of any income he enjoys over an amount to be determined will be designated for repayments. Bankers doubt, however, that Dankner will ever have the earning power to make a significant dent in the 300 million shekels he would owe, which means they will be writing it off.

Dankner’s biggest creditor is Hapoalim, to which he owes 150 million shekels. He owes 120 million shekels to Leumi, 100 million to Israel Discount Bank and 60 million to Mizrahi-Tefahot Bank. He also has debts of 40 million shekels to Credit Suisse of Switzerland and 10 million to Israel’s Union Bank.

Under the agreement, the boards of all the banks involved have to approve the Dankner bailout. Final deliberations on the mater with the various boards are expected to take place in the next few weeks.