In my opinion, in law, the panelists referred to the collateral given to the loan. In the circumstances of the case, as part of the examination of the materiality of the information regarding the breach, it was appropriate to examine the degree of change in the risk in which the company was exposed as a result of the breach. This is already because the language of Regulation 36(a) relates to the possibility that the information will have a material impact on the company. Hence the reason for the reference to collateral, which in our case is real estate assets whose value (in quick realization) is significantly higher than the amount of the debt, and it is not argued that the ability to realize them depends on the borrower's financial situation.
To this, it should be added that it was the ISA that claimed in its petition that the breach had a dramatic impact on the value of the company and indicated doubt about the company's ability to recover the credit it had given. If this is the case, it is reasonable to assume that it is necessary to examine whether this is indeed the case. In the framework of this examination, it is not possible to ignore the question of the probability of the existence of the alleged doubt. Such an examination requires consideration of the collateral given to the loan, their scope and quality. Another position voices the argument that there is no difference in the matter of a change in the risk to the company between a loan for which quality collateral has been made available in relation to a loan to the collateral that benefits the lender, and a loan that has not been given collateral at all. This is a hardened position, certainly when it is claimed to be a position that does not require the presentation of concrete data. It can be argued that the costs involved in the realization of collateral and the time required to do so are also relevant data, but such a claim does not negate giving weight to collateral. Moreover, to the extent that a claim is raised regarding expenses, it must also be examined on the merits. In this context, the conditions set out in the loan agreement may also be significant, such as the condition set in our case whereby the costs will vary on the borrower, and the condition that allows the loan to be made available for immediate repayment in the event that the value of the collateral falls below the set threshold (paragraphs 21.6 and 28 of the loan agreement, Appendix 26 to Lorenzi's response).
- Another statistic that joins the totality of the data is the determination of Castiel and Dekel Shafrir that when the information about the violation was published, it did not lead to a significant decrease in the value of the share, and thus constitutes an "indirect indication of the immateriality of the information" (paragraph 9 of the Kastiel and Dekel-Shafrir decision).
The ISA does not dispute the factual finding regarding the lack of fluctuation in trading after the publication of the information, but is of the opinion that in the circumstances of the case there was no room for use of it by the panelists. The ISA recalled that for the purpose of determining materiality, it is not required to prove a material effect on the price of the security, and that the "post-factum" test discussed in case law is only an auxiliary test and is not accurate. In our case, it was argued that its inaccuracy stemmed from the fact that the volume of trade was minimal. According to the ISA, the absence of continuous trading precludes the possibility of relying on the test, which assumes, in principle, that it is a stock with a trading volume and a level of tradability that expresses activity.