I will note that there is no claim that the small loan was material to the company and its grant was also not reported to the public. Indeed, it was defined as an "addendum" to the loan agreement, but the date of its repayment preceded the repayment of the large loan principal. I am of the opinion that in the framework of the examination of the case, it cannot be ignored that on the date on which the borrower breached the agreement of the large loan, which is the substantial loan, the date for the principal payment of this loan did not arrive. At that time, the borrower was only required to bear interest payments (Appendix 26 to Lorenzi's reply). This, in my understanding, was the approach of the Enforcement Committee, which I also accept (see paragraph 42 of the decisions of the chairman of the panel, paragraph 5 of the decision of Kastiel and Shafrir-Dekel).
- The borrower was in breach of the loan agreement of October 26, 2018 (paragraph 21 of the administrative statement of claims). It was determined that in August and September he made partial interest payments, and in the months of October-December he did not pay the interest payments on the large loan or the small loan principal. Castiel and Dekel Shafrir determined that Lorenzi acted to deal with the breach of the loan agreement quickly, quickly and relatively efficiently. Shortly after the date of the breach, he negotiated with the borrower to correct the breach, following which the new agreement was reached (paragraph 8 of their decision).
The ISA argues that the "signal" regarding the nature of the violation is reinforced by the fact that the failure in the payments began "immediately after the loan was granted and lasted for 4 months" (paragraph 52 of the petition). But this argument is difficult. The loan was granted at the beginning of April 2018 for a year, and the borrower was in breach at the end of October, i.e., about six and a half months later. Even if I refer to the date in August 2018 when the borrower did not pay part of the interest payments, and even if I ignore the fact that at that time, according to the Authority, he was not in breach, this is about four months after the loan was granted. With regard to the duration of the breach period, it should be noted that it did indeed continue until the agreement was formulated in the framework of the negotiations, but the borrower did not pay the interest for three months and not four (the settlement schedule indicates that in January 2019 the interest was paid (Appendix 30 to Lorenzi's response)). It appears that the duration of the breach in our case also involved the duration of the negotiations to which Castiel and Dekel-Shafrir referred in their decision. In any event, given that the total duration of the loan was one year, it is difficult to see the date of the breach as an indication of its materiality.