It should be noted that the Authority also disagrees with the determinations of Kastiel and Dekel-Shafrir regarding the manner in which the negotiations were conducted and durated. It was argued that it was puzzling that it took more than three months to conduct negotiations, the result of which was an increase in the loan to a borrower who did not meet his obligations. In fact, however, the result of the negotiations was not only an increase in the loan, but, inter alia, the addition of real estate collateral as well as rights to receive funds that the borrower had (see immediate report of February 5, 2019, minutes of the board meeting of February 3, 2019, Appendices 32 and 35 to Lorenzi's response). The entirety of the new agreement can explain the duration of the negotiations. More than necessary, I will note that Lorenzi's conduct, which acted to find a solution to meet the terms of the loan, is also consistent with the company's collection policy described in the 2018 periodic report published in April 2019 (Appendix 25 to Lorenzi's response).
- The three members of the panel made findings on the basis of the terms of the loan. The chairman of the panel was of the opinion that they were clarifying Lorenzi's position, according to which he saw the possibility of the borrower's failure to meet the loan payments as a real possibility, and for this purpose he ensured the existence of collateral (see also an email written by Lorenzi prior to the granting of the loan and his words in the minutes of the hearing of April 9, 2018, Appendices 23 and 24 to his response). Kastiel and Dekel-Shafrir were of the opinion that the terms of the loan were consistent with the position that the risk of default in loan payments was taken into account in advance when formulating the terms of the loan.
I will mention that the interest rate set for the loan is a high interest rate of 15.1% per annum; the collateral given for its guarantee are three income-producing real estate assets in Gush Dan with a market value of about ILS 23 million, and in quick realization about ILS 16 million (i.e., collateral whose value in quick realization significantly exceeds the amount of the loan); and in addition, compensation in the amount of ILS 1 million was determined for a breach of one of the terms of the agreement.