DOJ Investigates SIMAD Holdings as Camp Sales Begin and $230 Million in MCA Exposure Emerges
- F.I. Editorial Team
- 54 minutes ago
- 16 min read
Federal investigations add a new dimension to the SIMAD collapse
The bankruptcy of SIMAD Holdings has entered a more serious phase.
Federal prosecutors have opened two separate investigations involving the summer-camp company, its controlling owners and other businesses connected to brothers Michael and David Shabsels, according to The Read Deal and court records.
One investigation is a criminal grand-jury inquiry being conducted through the U.S. Attorney’s Office for the Eastern District of New York. SIMAD reportedly received a demand to produce records concerning the company, the Shabsels brothers and other companies they own or control.
The company also disclosed a separate civil investigation by the U.S. Attorney’s Office for the Southern District of New York involving allegations of fraud connected to federal COVID-era (PPP) financial assistance.
The Real Deal described that second matter as an investigation into possible Paycheck Protection Program fraud. The underlying SIMAD disclosure reportedly referred more broadly to COVID-era assistance and did not publicly identify the specific loans, recipient companies, amounts or alleged conduct being examined.
SIMAD said it is cooperating with both federal investigations. No criminal charge, indictment, civil complaint or final finding of wrongdoing has been publicly announced. A grand-jury investigation does not establish guilt, and a civil investigation does not establish liability.
The federal scrutiny arrives as SIMAD attempts to sell approximately 30 summer-camp properties through Chapter 11 and as creditors examine a financial structure involving Israeli bonds, regional banks, owner-linked obligations, related-party transfers and an extraordinary amount of merchant cash advance financing.
Today is a major date in the bankruptcy
An auction for SIMAD’s camp assets is scheduled for today, July 28, 2026, at 10:00 a.m. Eastern Time, if the debtors received competing qualified bids for any of the sale packages.
The court-approved procedures allow SIMAD to hold separate auctions for different camps. An auction is not required where a stalking-horse offer is the only qualified bid or where the debtors accept a qualifying transaction through the approved private-sale process.
Following any auctions, the debtors are expected to identify the successful bidders. Objections to the proposed sales are currently due July 31, with a sale hearing scheduled for August 4 at 1:00 p.m. Eastern.
Today’s proceedings could determine whether the disclosed offers remain in place, whether competing bidders push prices higher and how much value may ultimately become available to secured and unsecured creditors.
As of this article’s morning update, no auction results had been announced.
More than $230 million in MCA exposure across the wider enterprise
The MCA exposure was even larger than the more than $100 million tied directly to the SIMAD camp companies.
The SIMAD debtors reported obligations exceeding $100 million to approximately 42 merchant cash advance and short-term funding companies. Separately, the affiliated DAMIS real-estate debtors reported approximately $134 million in MCA obligations.
That places the reported total across the broader Shabsels-controlled enterprise at more than $230 million.
The Real Deal’s statement that the brothers accumulated more than $230 million from MCA lenders combines the short-term financing associated with the SIMAD camp businesses and the separate DAMIS real-estate businesses.
There may also be overlapping guarantees and claims. DAMIS’s MCA obligations were reportedly guaranteed across numerous DAMIS entities, SIMAD entities, non-debtor affiliates and the Shabsels brothers personally. The final allowed claims will therefore require reconciliation to prevent the same underlying obligation from being counted or recovered multiple times.
Even with that qualification, the combined figure is extraordinary. It places the SIMAD and DAMIS proceedings among the largest known tests of merchant cash advance stacking, collateral priority and cross-company guarantees.
What was SIMAD Holdings?
SIMAD Holdings Ltd. was the parent company of one of the largest privately owned networks of for-profit summer camps in the United States.
The portfolio included approximately 30 camp properties across New York, Pennsylvania, New Jersey, Maine, New Hampshire, Connecticut, North Carolina and Illinois. It included both day camps and overnight camps, many of which maintained their own management teams, employees, brands and long-standing relationships with families.
The properties served an estimated 20,000 campers. More than 20 of the camps catered primarily to Jewish families or provided Jewish programming.
SIMAD was controlled by Michael and David Shabsels.
The brothers also controlled a separate commercial-property enterprise through DAMIS Holdings and numerous subsidiaries. DAMIS owned or controlled shopping centers, offices, hotels, apartment properties and other real estate.
Although the SIMAD and DAMIS bankruptcies involve common ownership, guarantees and financial relationships, they consist of separate debtor groups with different assets and debt structures.
A growing operation with a dangerous cash-flow structure
The camps did not appear to be collapsing because families had stopped enrolling their children.
Published financial information indicated that SIMAD generated approximately $165 million in 2025 revenue and reported positive operating income and net income.
The camps also remained in demand. Mohawk Day Camp alone reportedly served approximately 1,900 campers in 2025 and was projected to generate nearly $23 million in 2026 revenue.
That makes the bankruptcy more instructive.
This was not simply a fading business using short-term funding to postpone an unavoidable shutdown. It appears to have been a viable operating business overwhelmed by leverage, financial complexity and an inability to manage its liquidity obligations.
Summer camps collect substantial amounts of money before delivering their services.
Families may make deposits or pay tuition during the fall, winter and spring. But much of that money is already committed to expenses that will arrive when the summer season begins:
Counselor and employee payroll
Food and supplies
Insurance
Transportation
Medical and safety personnel
Property repairs and maintenance
Activities and equipment
Customer refunds
A tuition payment appearing in a bank account is therefore not necessarily free cash flow.
It may be deferred revenue that must remain available for months until the camp provides the promised service.
For an MCA funder reviewing deposits without reconstructing the company’s deferred-revenue obligations, the camps could have appeared to generate enormous and dependable cash flow. But if the same tuition dollars were also supporting payroll, mortgages, bond payments, existing MCA remittances and new advances, the actual cash available for financing could be dramatically smaller.
The Israeli bond raise
In December 2025, SIMAD raised NIS 620 million through a bond offering on the Tel Aviv Stock Exchange.
The offering was worth approximately $195 million when issued. The obligation was later described in the bankruptcy filings as approximately $214 million, reflecting the amounts outstanding and the exchange rate used during the case.
The bond proceeds were not intended solely to remain inside the operating companies as new liquidity.
Published offering information indicated that approximately:
$50 million would be used to acquire camp assets from the controlling shareholders.
A similar amount would repay loans carrying personal guarantees from Michael and David Shabsels.
The remaining proceeds would be used for acquisitions and other corporate purposes.
Those uses were disclosed in connection with the offering. They are important because a substantial portion of the capital was used to purchase existing assets and repay owner-linked obligations rather than remain available to strengthen the camps’ operating liquidity.
Owner obligations and overlapping collateral concerns
SIMAD also reportedly disclosed that the owners had significant personal financial obligations secured by assets or cash flows belonging to company subsidiaries. That disclosure does not, by itself, prove that any asset was unlawfully pledged more than once.
It does raise significant questions:
Were operating-company assets supporting personal debts?
Did multiple creditors believe they had priority against the same property or revenue?
Were all guarantees and security agreements properly authorized?
Did later funders have a complete picture of earlier liens?
Which creditor perfected its interest first?
The federal investigations, bankruptcy discovery and creditor review may eventually provide more information about these relationships.
The disputed $34 million transfer
SIMAD missed its first scheduled bond interest payment on May 31, 2026.
The default followed the company’s disclosure that approximately $34 million had been transferred to companies controlled by Michael and David Shabsels.
The transfer was reportedly completed without required board approval. SIMAD’s audit committee demanded that the money be returned with interest, but the brothers later said they could not return it by the deadline.
The Israel Securities Authority requested information concerning the transfer and possible securities-law violations.
The transfer has been described in news reports as diverted, missing or improperly taken.
However, the bankruptcy court has not entered a final judgment determining that the brothers committed fraud or another crime. The federal and Israeli investigations also had not resulted in publicly announced charges as of this update.
What forced the Chapter 11 filing?
The company’s collapse should not be attributed to one event alone.
The disputed transfer contributed to the bond default. But the timing and possible enforcement of more than $100 million in MCA obligations made the need for bankruptcy immediate.
The debtors’ restructuring declaration identified two primary triggers:
SIMAD missed its May 31 bond interest payment.
MCA obligations were approaching default in early June.
The debtors said they feared that an MCA default and acceleration could allow one or more providers to exercise remedies that would cut the businesses off from their operating accounts and receivables.
Losing access to cash at that point could have prevented the camps from paying employees and opening for the summer season.
That was the debtors’ stated concern. It was not a final judicial determination that any specific MCA company held perfected rights to seize every SIMAD account.
SIMAD files Chapter 11
SIMAD Holdings and more than 60 affiliated debtors began filing Chapter 11 cases in the U.S. Bankruptcy Court for the District of New Jersey on June 4, 2026.
The lead case is being administered as SIMAD Holdings Ltd., Case No. 26-16388, before Chief Bankruptcy Judge Christine M. Gravelle.
The company initially estimated:
Assets between $100 million and $500 million
Liabilities between $500 million and $1 billion
Between 50,001 and 100,000 creditors
Assaf Ravid was appointed as chief restructuring officer and assumed control over the debtors’ operations and bank accounts.
The automatic stay stopped most collection activity and gave the company an opportunity to maintain operations while arranging financing and pursuing camp sales.
A remarkably thin cash cushion
SIMAD reportedly entered bankruptcy with approximately $18.8 million in cash.
Its initial emergency operating budget required approximately $7.2 million in disbursements over a short opening period.
That meant nearly 38% of the company’s petition-date cash was needed almost immediately to cover essential expenses required to prepare and operate the camps.
The comparison shows how vulnerable the companies had become.
SIMAD may have generated approximately $165 million in annual revenue, but it entered bankruptcy with little margin for error at the moment its seasonal expenses were accelerating.
The bankruptcy financing was not all new cash
The bankruptcy court approved up to $180 million in debtor-in-possession financing associated with the Israeli bondholders.
Approximately $60 million represented new money, while approximately $120 million represented a roll-up of existing pre-bankruptcy bond debt.
The court also approved approximately $30 million in financing from Bank of New Hampshire, consisting of about $10 million in new money and a $20 million roll-up of its existing claim.
A roll-up converts pre-bankruptcy debt into a post-bankruptcy obligation with enhanced priority. It does not provide the same amount of fresh cash to the debtor.
The two headline facilities therefore totaled approximately $210 million, but the identifiable new-money component was closer to approximately $70 million.
The financing allowed the camps to operate during summer 2026 and helped preserve their going-concern value. It also placed DIP financing and other priority obligations ahead of most general unsecured claims.
Federal investigators enter the picture
SIMAD reportedly learned of the two federal investigations on July 21 and disclosed them publicly on July 23.
The Eastern District criminal investigation reaches beyond SIMAD itself. It reportedly includes:
SIMAD Holdings
Michael Shabsels
David Shabsels
Other companies owned or controlled by the brothers
The company received a document demand related to the grand-jury investigation.
The separate Southern District civil inquiry concerns alleged fraud involving COVID-era financial assistance. SIMAD’s annual reporting reportedly identified two PPP loans totaling several million dollars that were forgiven and that the company said were used for permanent and seasonal payroll.
However, the company’s federal-investigation disclosure did not explicitly identify those two loans as the subject of the civil investigation.
Until prosecutors provide more information, the PPP issue should be described as an investigation into alleged fraud, not proof that fraud occurred.
Why the federal investigations matter to creditors
The federal investigations could affect the bankruptcy even before authorities decide whether to bring charges or civil claims.
Document production may provide information concerning:
Transfers among SIMAD, DAMIS and other owner-controlled companies
The use of bond and financing proceeds
Owner-linked debts and guarantees
Pandemic-relief applications and forgiveness records
Payroll representations
Intercompany payments
Assets transferred outside the debtor estates
The relationship among the debtors, owners and non-debtor affiliates
The investigations could potentially identify transfers or claims that allow the bankruptcy estates to recover additional value.
They could also result in government repayment demands, civil claims, penalties, forfeiture disputes or restrictions that delay distributions and complicate creditor recoveries.
The camp-sale process
SIMAD is pursuing camp-by-camp sales rather than attempting to preserve the entire portfolio under one owner.
Existing camp operators, nonprofits, investors and groups connected to camp families have submitted offers. More than 70 potential buyers reportedly expressed interest during the early stages of the sale process.
The transactions fall into several different categories:
Approved private sale: A transaction already authorized by the bankruptcy court.
Stalking-horse bid: An opening offer that establishes the minimum value for an auction.
Proposed private sale: A negotiated transaction that remains subject to notice, objections and court approval.
Credit bid: A transaction in which a secured creditor uses debt rather than cash to purchase its collateral.
A bid is not necessarily a completed sale, and a credit bid does not create the same cash proceeds as an ordinary purchase.
Camp Achim — $7 million approved private sale
SIMAD agreed to sell Camp Achim in Catskill, New York, to a group connected to its existing acting manager for $7 million.
The bankruptcy court approved the transaction on July 20. The reported price was slightly above the camp’s approximately $6.3 million appraisal.
Mohawk Day Camp — $68 million Zaslav-backed bid
Grandview Ventures Group submitted a $68 million stalking-horse bid for Mohawk Day Camp and Mohawk Country Day School in White Plains, New York.
The investment group is associated with Warner Bros. Discovery CEO David Zaslav, whose children previously attended Mohawk.
The camp and school share a roughly 40-acre campus. A December 2025 appraisal reportedly valued Mohawk at approximately $85.8 million.
Because the $68 million offer is a stalking-horse bid, it establishes the opening floor rather than necessarily determining the final sale price. A competing qualified bidder may offer more during today’s auction.
Camp Lokanda — $18.15 million proposed sale
SIMAD agreed to an approximately $18.15 million transaction for Camp Lokanda in Glen Spey, New York.
The proposed buyer is 18 Lions LLC, a group connected to Ronen and Dana Gabbay, who have operated the camp for years.
Camp Chen-A-Wanda — $17 million proposed sale
Eleven11 Holdings LLC submitted an approximately $17 million offer for Camp Chen-A-Wanda in Thompson, Pennsylvania.
The purchasing group is connected to Jon Grabow, who has co-owned and directed the camp since 2008.
Camp Echo — $12 million proposed sale
Ohel Children’s Home and Family Services submitted an approximately $12 million offer for Camp Echo in Burlingham, New York.
Ohel is a nonprofit organization providing mental-health, disability and family services.
Sale paperwork reportedly stated that the buyer did not intend to continue the property under the existing Camp Echo brand, distinguishing it from transactions designed to maintain the current camp identity.
Camp Mesorah — approximately $5.6 million credit bid
Camp Mesorah is subject to a proposed private credit-bid transaction valued at approximately $5.6 million.
The consideration reportedly consists of:
Approximately $3.8 million in pre-bankruptcy secured claims
Approximately $1.8 million in DIP claims
Assumption or payment of certain cure obligations
A junior lender would reportedly receive $50,000 and a contingent 5% equity interest after the purchaser recovered its invested capital.
This reported $5.6 million is primarily debt cancellation, not cash entering the estate.
Why the sales will not automatically repay MCA companies
The amount available to unsecured creditors depends on the payment waterfall, not the announced sale prices.
Sale proceeds may first be reduced or distributed to cover:
Transaction and closing expenses
Contract cure payments
Property-specific secured debt
DIP financing claims
Administrative expenses
Taxes and professional fees
Other priority claims
Junior secured debt
General unsecured creditors
A credit bid further reduces the amount of cash entering the estate because the buyer uses secured debt as part or all of the purchase price. Camp Mesorah illustrates that distinction.
The property may be described as selling for approximately $5.6 million, but the transaction would not generate a $5.6 million cash fund for distribution to MCA companies. Most of the consideration would consist of secured and DIP claims being cancelled.
The same principle applies across the portfolio: headline transaction value is not the same as cash available for unsecured-creditor recoveries.
What the MCA industry should be watching
How did so many funders miss the total exposure?
The SIMAD camp companies reportedly accumulated more than $100 million from approximately 42 MCA and short-term providers.
Across SIMAD and DAMIS, reported MCA obligations exceeded $230 million.
Every provider may have concluded that its own remittance was manageable. Collectively, the obligations were drawing against overlapping businesses, affiliates, assets and cash flow.
Traditional UCC searches may not have revealed the complete picture because filings can be:
Delayed
Listed under different entities
Filed under unfamiliar legal names
Terminated incorrectly
Unable to show current balances
Unable to reveal unfiled positions
Unable to identify every cross-guarantee
Were the same receivables supporting multiple transactions?
The bankruptcy involves dozens of operating entities, land-owning companies, bank accounts, guarantees and financing agreements.
The cases may eventually reveal whether multiple funders believed they had purchased or obtained rights against the same or overlapping receivables (future sales).
That could create disputes over:
Which entity earned the revenue
Which entity owned the receivables
Which company signed each agreement
Which bank account received the money
Whether the receivables were already encumbered
Which creditor perfected its rights first
Whether guarantees crossed between SIMAD and DAMIS
Did the MCA companies have perfected collateral?
The SIMAD debtors reportedly questioned whether MCA companies had perfected interests in cash held in their bank accounts through deposit-account control agreements.
An ACH authorization permits a funder to initiate a withdrawal.
It does not automatically provide first-priority control over the account.
A UCC filing, blanket lien clause and personal guarantee may also offer limited protection where a bank, bondholder, mortgage lender or DIP lender has a superior perfected claim.
The central distinction is:
Bank-account access is a payment mechanism. It is not automatically collateral priority in bankruptcy.
Could some MCA agreements be treated as loans?
The debtors have referred to the obligations as “MCA loans.”
That terminology does not resolve the legal characterization.
Properly structured revenue-based or sales-based financing is generally documented as a purchase of future receivables rather than a loan.
Courts may evaluate whether:
Reconciliation was genuinely available
The agreement had an unavoidable repayment term
The transaction functioned like fixed debt in practice
This is not an argument against revenue-based financing
SIMAD should not be used as proof that every merchant cash advance or revenue-based-financing transaction is harmful.
These products can provide useful capital to companies that need speed, flexibility or an alternative to conventional credit.
The problem is what happens when too many positions are placed behind the same revenue stream without a reliable understanding of the borrower’s complete capital structure.
SIMAD and DAMIS appear to combine nearly every significant underwriting risk:
Extreme stacking
Seasonal and prepaid revenue
Multiple operating and asset-owning entities
Cross-company guarantees
Large amounts of senior secured debt
Owner-linked obligations
Potentially overlapping collateral
Related-party transfers
Unclear visibility across separate business groups
A financing product intended to rise and fall with revenue can become destructive when dozens of providers expect withdrawals from cash that is already committed elsewhere.
The larger lesson
The SIMAD bankruptcy may become one of the most important MCA case studies in years.
The final conclusions will depend on what the bankruptcy court, creditors’ committee, federal prosecutors and Israeli regulators uncover.
But the information already available points to a major failure of capital-stack visibility.
A funder can have:
A signed agreement
A personal guarantee
A UCC filing
ACH authorization
Access to bank statements
And still discover in bankruptcy that senior creditors control nearly all the valuable cash and collateral.
What happens next?
The case is now moving along three parallel tracks.
First, the July 28 auction and August 4 sale hearing will determine who acquires a significant portion of the camp portfolio and whether competing bids increase the disclosed prices.
Second, the creditors’ committee and bankruptcy professionals will continue examining liens, related-party transfers, guarantees, MCA agreements and transactions among SIMAD, DAMIS and other affiliated companies.
Third, federal prosecutors will determine whether the evidence supports criminal charges, civil claims, repayment demands or no formal enforcement action.
The most important developments to watch include:
Results of the July 28 auction
Successful and backup bidders
Final camp sale prices
The amount of cash remaining after secured claims
The companies and individuals covered by federal document requests
Identification of the pandemic-relief funds under review
Any government repayment or forfeiture claim
Investigation of the approximately $34 million transfer
Challenges to creditor liens and priority
Recharacterization of MCA agreements
Recoveries for unsecured MCA creditors
Any criminal charges or civil enforcement action
Funder Intel will continue updating this report as auction results, court orders, creditor disputes and federal-investigation developments become public.
Frequently asked questions
Is the Department of Justice investigating SIMAD Holdings?
Yes. SIMAD disclosed a criminal grand-jury investigation being conducted through the U.S. Attorney’s Office for the Eastern District of New York. The investigation reportedly involves SIMAD Holdings, Michael and David Shabsels, and other companies owned or controlled by the brothers.
Is SIMAD being investigated for PPP fraud?
SIMAD disclosed a separate Southern District of New York civil investigation involving alleged fraud connected to COVID-era assistance. The Real Deal reported that the investigation concerns possible Paycheck Protection Program fraud. The specific recipient companies, loan amounts and alleged conduct have not been publicly identified.
Have Michael or David Shabsels been charged?
No publicly announced criminal charge or indictment had been identified as of the morning of July 28, 2026. An investigation does not establish guilt or guarantee that charges will be filed.
Is SIMAD cooperating with federal investigators?
SIMAD has stated that it is cooperating with both federal investigations.
How much did SIMAD owe MCA companies?
The SIMAD camp debtors reported more than $100 million in obligations to approximately 42 MCA and short-term funding providers.
Where does the $230 million MCA figure come from?
The figure combines more than $100 million attributed to the SIMAD camp debtors with approximately $134 million attributed to the affiliated DAMIS real-estate debtors. The combined reported exposure exceeds $230 million.
Does the $230 million include duplicate claims?
The disclosed figure represents the reported face amount of the obligations across both debtor groups. Because many obligations carry guarantees from multiple companies and the owners, the final claims must be reconciled to avoid duplicate recoveries.
When did SIMAD file for bankruptcy?
SIMAD Holdings and more than 60 affiliated debtors began filing Chapter 11 cases on June 4, 2026, in the U.S. Bankruptcy Court for the District of New Jersey.
Why did SIMAD file Chapter 11?
The company faced a missed bond payment, a disputed approximately $34 million transfer, substantial secured debt and more than $100 million in camp-related MCA obligations. The possible acceleration and enforcement of the MCA agreements threatened access to operating cash immediately before the summer season.
Is the camp auction happening today?
The court-approved procedures scheduled an auction for July 28, 2026, at 10:00 a.m. Eastern, if competing qualified bids require one. Some camps may be sold through private transactions and therefore may not be included in an auction.
What did David Zaslav bid on?
Grandview Ventures Group, associated with Warner Bros. Discovery CEO David Zaslav, submitted a $68 million stalking-horse bid for Mohawk Day Camp and Mohawk Country Day School.
Which camp sale has already been approved?
The bankruptcy court approved the $7 million sale of Camp Achim to a group connected to the camp’s existing acting manager.
How much are the disclosed camp transactions worth?
The six publicly disclosed transactions carry combined headline consideration of approximately $127.75 million.
Does that mean creditors will receive $127.75 million?
No. Some transactions remain proposed, and the Camp Mesorah consideration primarily consists of a secured-creditor credit bid rather than cash. Secured debt, DIP financing, administrative expenses, cure costs and other priority obligations must also be paid before general unsecured creditors receive distributions.
Will MCA companies recover their money?
It is too early to know. Recoveries will depend on sale proceeds, collateral priority, claim objections, DIP financing, administrative expenses, potential avoidance actions and whether individual MCA providers can establish valid secured or unsecured claims.
Are the camps still operating?
The camps largely opened for the 2026 season after the bankruptcy court authorized emergency cash use and post-bankruptcy financing.
Could the federal investigations affect MCA recoveries?
Potentially. Investigators could identify recoverable assets or transfers that benefit the estates. Government claims, repayment demands, forfeiture proceedings or additional legal expenses could also delay or reduce distributions. No specific financial impact has yet been established.
