Brothers Michael and David Shabsels, once dubbed the "summer camp kings of New York" for amassing a $400 million fortune, are now facing the collapse of their vast empire. Their company, Simad Holdings, which operated numerous summer camps as well as other businesses, has filed for Chapter 11 bankruptcy protection, triggering an auction of its assets and leaving parents of enrolled campers in a state of uncertainty. The crisis is compounded by a default on bond payments, a significant transfer of company funds to a personal account by Michael Shabsels, and an ongoing investigation by the Department of Justice.
Financial Downfall
The Shabsels brothers' financial difficulties appear to stem from aggressive expansion funded by substantial borrowing. This strategy led to a complex web of debt, including loans from Israeli bondholders who claim to be owed $214 million after the brothers defaulted on payments in May. According to court documents, a missed interest payment for their bonds alone, due on May 31, totaled nearly $7 million.
Adding to the financial strain, the brothers reportedly took out numerous high-interest Merchant Cash Advance loans, totaling approximately $200 million when missed payments are accounted for. The situation was further exacerbated when Michael Shabsels allegedly transferred $32 million from the company's accounts to his personal account, leaving the holding company critically short on funds to meet its obligations to bondholders.
Sources suggest a rift has formed between the brothers, with Michael, 56, traditionally handling finances, and David, 49, more involved in day-to-day operations. One camp partner described David as honest but suggested he was aware of his brother's financial dealings, despite claims to the contrary.
DOJ Investigation and Asset Auction
The financial turmoil has drawn the attention of the Department of Justice. An inquiry into Simad Holdings is underway, according to filings on the Israeli stock exchange. The brothers' prior success, including the $37.5 million sale of their University Sports Publications in 2009, which they parlayed into their camp business under Simad Holdings, stands in stark contrast to their current predicament.
The auction of the summer camp empire, estimated to be worth $400 million, has been ongoing. The timing of the sell-off, during the peak summer camp season, has caused significant distress for parents and campers. More than 120 letters from concerned parents were submitted to the bankruptcy judge, pleading to prevent disruptions to their children's summer experience.
Among the notable camps operated by the Shabsels were Camp Lokanda in Glen Spey, NY; Camp Achim in Catskill, NY; Camp Chen-A-Wanda in Thompson, Pa.; Camp Malka in Greenville, NY; Camp Lavi in Lakewood, Pa.; and Camp Mesorah in Guilford, NY.
Notable Interest in Mohawk Day Camp
Warner Bros. Discovery CEO David Zaslav has reportedly submitted a $68 million bid for Mohawk Day Camp, a facility his children attended. Zaslav, through his holding company Grandview Ventures, is seeking to acquire the camp and its associated pre-school.
The collapse of the Shabsels' empire marks a dramatic fall for individuals who built a significant business in the summer camp industry. Their past ventures also included real estate investments under the portfolio name Damis Holdings.