Eliezer Fishman, who controls some of the biggest Israeli retail chains, a top-selling newspaper and a stake in real estate holding company Jerusalem Economy, spent last Thursday in court arguing over his debt of about $1 billion.
Leviev and Fishman declined to comment.
CAVALIER
Zilberfarb pointed to a "domino effect" in the banks' new attitude towards the tycoons.
The banks had "extended so much credit to one tycoon because they trusted his abilities and his vision," but he ended up losing money. They realized this may happen to another, and then another, until they stopped lending, he said.
At the same time, the government passed a law to break up the concentration of power that is now forcing conglomerates to sell billions of dollars in assets, and the time they have is running out.
Cavalier behavior among the tycoons was noticeable beyond the overleveraging, like in generous dividend policies, said Ofir Naor, a lawyer representing bondholders in a number of debt restructuring talks with Israeli conglomerates.
"Dividend decisions were made without any debate. The controlling shareholder came, told a story, and everyone said 'amen'," Naor said. "Today the hurdle is much higher."
In 2013, Prime Minister Benjamin Netanyahu pushed through legislation known as the concentration law that forces conglomerates to chose between control over banks and other financial institutions or non-financial companies, like refineries or real estate firms.
The law gives them until the end of 2019 and it was estimated that 40 firms worth 80-100 billion shekels would come up for sale. But there has been only one major deal so far: China's Bright Food bought control of foodmaker Tnuva for $1.1 billion.