Nochi Danker Begins Debt Talks; Danny Dankner Appeals Sentence

Two members of powerful but embattled family seek to mitigate recent setbacks.

Nochi and Danny Dankner, two members of the powerful but embattled family, took action this week to mitigate the effects of the legal and financial setbacks they have suffered over the last two months.

Nochi Dankner, who lost control of the indebted IDB Group conglomerate earlier this month, has opened negotiations with Israel’s four largest banks over his private debt, which is estimated at between 900 million shekels ($257 million) and 1 billion shekels ($285 million). Dankner has retained attorney Lipa Meir, who is also representing IDB Development Corporation, an IDB Group company, to conduct the talks.

Most of Dankner’s private debt is held through his investment vehicles Tomahawk Investments and its subsidiary Ganden Investments. Of the four banks carrying the debt − Bank Hapoalim, Bank Leumi, Israel Discount Bank and Mizrahi-Tefahot Bank − Hapoalim has the greatest exposure to Dankner’s debt, with loans outstanding of some 200 million shekels to Tomahawk. Tomahawk owes as much as 100 million shekels to Discount and 30 million shekels to Mizrahi Tefahot. Ganden owes 45 million shekels to Mizrahi-Tefahot. While Leumi has 450 million shekels in loans to Ganden, the debt is guaranteed not only by Dankner but by his partners in the company, which include his sister Shelly Bergman-Dankner.

Stripped of his shares in the IDB group as part of a bailout accord, Nochi Dankner is not believed to have assets that would come close to covering the debt he owes. Last week, he filed a motion in Tel Aviv District Court asking it to reverse its decision awarding the IDB group to the Elsztain-Ben-Moshe group, asserting that the latter’s Extra group was unfit to control the conglomerate.

Meanwhile, his cousin Danny Dankner on Monday appealed a sentence handed down last month for his conviction on charges of fraud and other misconduct while serving as chairman of Hapoalim. Dankner was sentenced by Tel Aviv District Court to a year in prison, fined 1 million shekels and given a one-year suspended sentence. He was expected to begin serving time from the beginning of February, but is now asking to delay his prison sentence.

Danny Dankner had reached a plea bargain with prosecutors to settle the four separate indictments in which he admitted to committing fraud, corporate breach of trust, receipt of property through subterfuge and breach of banking governance standards.

In his appeal to the Supreme Court, he asserted that the punishment he received was “unprecedented in its severity” and asked the court to convert his prison sentence into community service. Dankner noted that former Prime Minister Ehud Olmert, who he contended committed far more serious offenses, received community service.

Moti Kimche