DAMIS Holdings Files Chapter 11 in New Jersey

DAMIS Holdings LLC, the holding entity at the center of a sprawling network of resort, summer-camp, and commercial real estate businesses controlled by brothers Michael and David Shabsels, filed for chapter 11 protection on June 4, 2026, in the U.S. Bankruptcy Court for the District of New Jersey. The case, In re DAMIS Holdings LLC, No. 26-16439 (CMG), is assigned to Chief Judge Christine M. Gravelle and is one node in a multi-hundred-entity restructuring that has spilled across two jointly and procedurally administered groups. In its petition, DAMIS Holdings estimated assets of $100 million to $500 million against liabilities of $500 million to $1 billion, and named Perry M. Mandarino as its independent chief restructuring officer with full operational control of the debtors.

DAMIS Holdings Files Chapter 11 in New Jersey

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A two-brother empire of resorts, camps, and shopping centers

The DAMIS filing is not a single-company reorganization. According to the petition, DAMIS Holdings is wholly owned in equal halves by Michael Shabsels and David Shabsels, who have also filed their own individual chapter 11 cases. The voluntary petition attaches a rider listing roughly 130 affiliated limited liability companies, organized largely as matched "Landco" and "Operatingco" pairs and "Real Estate" and "Leasing" pairs, alongside named camp entities such as Pine Forest, Island Lake, Camp Med-O-Lark, Belgrade Lakes Summer Camps, and Summit Camp.

A creditor filing later clarified the architecture. DAMIS Holdings and 88 other affiliates filed together as the "DAMIS Debtors," jointly administered under case number 26-16439. On the same day, 61 additional affiliates filed as the "SIMAD Debtors" and were procedurally consolidated under SIMAD Holdings Ltd., case number 26-16388 (CMG). The SIMAD side owns and operates summer camps; the DAMIS side owns and operates other real estate, including shopping centers, multifamily properties, offices, hotels, and resorts. The petition reports the debtor's business under NAICS code 7212, the classification for recreational and vacation camps and RV parks. You can review the chapter 11 petition and affiliate rider and the joint administration motion directly.

Merchant cash advances and a post-petition account sweep

The trigger for the filings was acute liquidity pressure from merchant cash advance and short-term funders. The debtors state they appointed Mandarino as CRO after recognizing the significant liabilities facing the group, then filed to invoke the automatic stay and stave off the exercise of remedies by those funders that could strip the debtors of their remaining cash.

The clearest illustration is Stony Creek Operating Co, LLC, which owns and operates the "1000 Acres Ranch," a guest ranch and resort on the Hudson River in the Adirondack Mountains. The property offers 69 accommodations and activities including horseback riding, tubing, kayaking, hiking, and swimming, with on-site restaurants, bars, and event space, and operates seasonally from May to November. Stony Creek employs roughly 29 workers, most seasonal hires who start in May, plus about six year-round full-time staff, and a single season costs more than $1 million to run. In the ordinary course, DAMIS Holdings funds Stony Creek at the start of each operating season.

In the days before the petition, Stony Creek had defaulted to a merchant cash advance funder and, by the petition date, lacked the cash to keep operating. According to the debtors' emergency cash collateral and wages motion, the funder, believed to be Bloc Funding, swept Stony Creek's TD Bank account after the petition date despite the automatic stay, leaving the account at a negative balance and deepening the company's distress on the eve of its peak season.

A capital structure with secured lenders in the tens of millions

Behind the camps and resorts sits a layered commercial real estate debt stack, and the early docket activity has been dominated by secured lenders contesting the debtors' use of cash collateral.

TriState Capital Bank, acting as administrative agent for itself and Wayne Bank, moved to prohibit the use of its cash collateral and to compel an accounting. Its loan funds the Big Flats Shopping Center in Big Flats, New York, which two affiliated debtors, 830 County Road 64 Real Estate LLC and 830 County Road 64 Leasing LLC, operate under a 99-year ground lease acquired in September 2024. Under a September 27, 2024 credit agreement, TriState lent $23 million and Wayne Bank lent $5 million, a $28 million aggregate loan guaranteed unconditionally by the Shabsels brothers and maturing October 1, 2029. The borrowers stayed current until they missed the June 1, 2026 payment. As of the petition date, TriState says it was owed $26,777,860 in principal plus $143,552.65 in accruing default-rate interest, on top of fees and a possible swap termination charge. TriState's motion to prohibit cash collateral use argues the debtors had spent a week in chapter 11 without seeking court authorization or lender consent to use its rents.

First Financial Bank lodged a parallel objection. FFB holds first-priority liens on the rents of seven properties through a cross-defaulted, cross-guaranteed, and cross-collateralized relationship of seven loans, with original principal amounts of roughly $10.8 million (5707 MacCorkle Avenue), $8.4 million (771 Corporate Drive), $19.5 million (3413 Tittabawassee Road), $10.45 million (4328 Bay Road), $12.375 million (South Loop West), $15 million (400 Greens Road), and $13 million (2974 Coppercreek Road), together approaching $90 million. In its objection to the cash collateral motion, FFB contends that its security interest in rents continues automatically post-petition under Bankruptcy Code section 552(b)(2), that the debtors failed to provide a detailed budget or respond to outreach, and that the proposed replacement liens amount to illusory adequate protection.

Payroll funding fought property by property

With multiple lenders refusing consent, the debtors have been forced to seek cash collateral and payroll relief in piecemeal, expedited tranches. Their emergency motion for cash collateral and operational relief, filed June 15, sought authority to fund prepetition and post-petition salaries, payroll taxes, and critical-vendor claims in an amount not to exceed $700,000, with all funds flowing through accounts controlled by the CRO.

After the U.S. Trustee submitted comments, the debtors revised the proposed order and the court entered interim cash collateral relief on June 16. The fight has since proceeded debtor-by-debtor. On June 22, the debtors filed a revised interim payroll and cash collateral order covering the Rocking Horse Ranch and SplashDown Beach operating and land entities, negotiated with Visions Federal Credit Union and NBT Bank, N.A., and the court held a further payroll-funding hearing the same day.

The debtors are represented in the petition by Michael D. Sirota of Cole Schotz P.C., with Faegre Drinker Biddle & Reath LLP appearing as proposed counsel in later cash collateral filings, and Kroll Restructuring Administration LLC serving as claims and noticing agent. No trustee or examiner has been appointed and no official committees had been named as of these early filings. With the operating season underway, dozens of secured lenders in the mix, and an alleged stay-violating account sweep already on the record, the DAMIS and SIMAD cases are shaping up as a contested, liquidity-driven restructuring rather than a consensual one.