Civil Case (Tel Aviv) 51721-03-20 Dr. Shlomo Ness v. Kost Forer Gabbay Consolidation of Claims Kassirer

I have before me a lawsuit filed by the liquidators of Agrexco, an agricultural export company in a tax appeal (hereinafter: the "Company" or "Agrexco"), against the defendant, Coast Forer Gabbay & Kassirer (a registered partnership) (hereinafter: "Coast Forer" or "the Defendant") alleging failures in the audit of the company's financial statements in the years 2007-2009.

Background

1. Agrexco was established in 1956 as a government-controlled company, and for decades engaged in the export, marketing and distribution of agricultural produce from Israel to international markets. Its activities are intended, among other things, to promote the agricultural sector in Israel and to provide growers with an organized marketing framework abroad.
2. From 2006 until the company entered into insolvency proceedings in 2011, the defendant served as the company's auditor. In the first year of this period, the defendant shared her position with the accounting firm Fahn Kanna & Co., while from 2007 the defendant served alone as the auditing accountant.
3. During the years preceding the company's collapse, Agrexco continued to operate on a large scale, including raising debt from the public through the issuance of bonds in December 2007, and receiving credits from various entities. This activity was carried out on the basis of audited financial statements, which bore the defendant's opinion.
4. On June 30, 2011, against the background of the severe economic crisis in which it found itself, Agrexco filed a request with the District Court for a stay of proceedings order. On the same day, a stay of proceedings order was issued, and later liquidation proceedings were also opened.  As part of these proceedings, Adv. and CPA Dr.  Shlomo Ness and CPA Eli Sheffler were appointed as the liquidators of the company (hereinafter: the "liquidators" or "the plaintiffs").
5. The Ottoman Settlement [Old Version] 1916On August 25, 2011, a preliminary opinion was submitted in the liquidation proceedings by CPA Yehuda Barlev (hereinafter: "Barlev Opinion"), which was commissioned by the trustee of the company's bondholders. The opinion focused on the period from the issuance of the bonds in 2007 until the collapse of the company, and pointed to a series of material deficiencies in Agrexco's audited financial statements.
6. 12-34-56-78 Chekhov v. State of Israel, P.D.  51 (2) In the Barlev opinion, it was argued, inter alia, that the company's financial statements did not adequately reflect its financial situation, and that they included misleading representations regarding its equity, liabilities and results of its operations.  It was also argued that the company recognized various payments to growers, including grants and advances, as assets, even though the accounting conditions for this recognition were not met, and that in this way significant losses accumulated over the years were concealed (pp.  7-8 of Barlev's opinion).
7. Barlev's opinion further noted that this accounting presentation enabled the company to present its alleged compliance with the financial standards set out in the bonds (hereinafter: the "Covenants"), to postpone their realization for immediate repayment, and to continue its activity while deepening its obligations to its creditors. The opinion emphasized that this conduct caused the economic crisis to be exposed late, and with greater intensity, and that the creditors' damage was increasing (pp.  7-8 of the Barlev opinion).
8. Later in the liquidation proceedings, the court appointed accountant Dror Aviv as an investigator to examine the causes of the company's collapse. On June 23, 2013, the investigator submitted a detailed investigation report (hereinafter: the "Investigator's Report"), which determined that for years Agrexco operated in a non-economic business model, while providing benefits, subsidies and surplus payments to growers, which did not match its economic capabilities (pp.  2 and 10 of the investigator's report).
9. The investigator's report noted that in order to finance this activity, significant losses were concealed in the financial statements, inter alia, by regulating profits, recording fictitious debts and offsetting them against real debts, and improper recognition of assets. It was further noted that these concealment mechanisms were not discovered by the company's auditors, including the defendant, and that as of 2007 it was even possible to expand the scope of the concealment (p.  18 of the investigator's report).
10. In the investigator's report, the defendant was attributed involvement in these omissions, inter alia, in that it did not act to locate fictitious debts, did not prevent offsets made in contravention of accounting standards, and did not require proper disclosure in the financial statements regarding the scope of the losses and the company's true condition (pp. 191-192 and 194 of the investigator's report).
11. According to the liquidators, after receiving the investigator's report, they continued to carry out additional examinations and analyses, out of a desire to exercise prudent judgment regarding legal proceedings, in view of the costs involved and their possible impact on the liquidation fund.
12. Copied from NevoOn June 2, 2015, the liquidators approached the defendant with a request to receive her response to the findings of the investigator's report. On December 22, 2015, the defendant provided a detailed written response to the allegations raised against her.
13. On January 3, 2018, the liquidators approached the defendant with a proposal to hold a lawsuit in order to eliminate the need to file a lawsuit. The proposal was accompanied by a draft statement of claim, and included an agreement in principle according to which if the discussion is not successful, the defendant will not raise a claim of limitation in relation to the period prior to that date.  The defendant agreed to the offer, and the parties engaged in negotiations that lasted for a long period of time.
14. When the contacts between the parties did not mature into agreements, the defendant announced the end of the dialogue at the end of 2019. On March 30, 2020, the liquidators filed a monetary claim against the defendant in the District Court in the amount of ILS 150 million (for fee purposes).
15. The lawsuit was filed on behalf of both the company and its creditors. In the statement of claim, the liquidators noted that they had been assigned the rights of the company's main creditors, including the bondholders and a shipping company that was one of its creditors, in relation to any claim or cause of action related to the company's collapse, including against the auditing accountants.
16. In summary, the statement of claim claimed that the defendant was negligent in her role as the company's auditor, by approving financial statements that included misleading representations and concealed losses of considerable amounts; that these omissions enabled the company to continue its activity for several more years despite its financial situation; and that as a result, the company and its creditors suffered extensive damages.
17. The defendant filed a motion to dismiss the claim in limine, claiming that the creditors' claim was time-barred; that the company's claim does not disclose a cause of action or damage caused to it as distinct from the creditors' damages; and that there was a heavy delay in filing the claim.
18. In a judgment dated May 4, 2022, I granted the defendant's motion to dismiss the claim in limine (hereinafter: the "Decision to Dismiss"), determining, inter alia, that the creditors' claim was time-barred; that the company's claim does not disclose damage caused to it as distinct from the creditors' damages; and that the claim suffers from considerable delay.
19. An appeal was filed against the removal decision to the Supreme Court. In its judgment in CA 4627/22, the Supreme Court accepted the appeal (hereinafter: the "Appeal Decision").  It was held that in the circumstances of the case, the conditions justifying the dismissal of a claim due to statute of limitations, lack of cause or delay were not met, and that the hearing should be returned to the District Court for the purpose of clarifying the claim on its merits.
20. With regard to the statute of limitations claim, it was ruled that the relevant date for the start of the statute of limitations is the date of the submission of Barlev's opinion in August 2011, which pointed to material defects in the company's audited financial statements and damage caused to its creditors. However, since the defendant agreed, in the framework of the dialogue conducted between the parties as of January 3, 2018, not to raise a claim of limitation in relation to the period preceding it, there is room to apply Kost's consent not to raise a claim of limitation in relation to both the company's claim and the creditors' claim, even if the rights checks were actually granted at a later date.  Therefore, it was determined that the creditors' claim should be considered as if it had been filed on that date, before the statute of limitations had passed.
21. In addition, it was determined that there was no reason to dismiss the claim due to delay, since it was not proven, at this stage, that there was a waiver of a right, a change for the worse in the defendant's situation, or a lack of good faith on the part of the liquidators. Therefore, it was determined that the clarification of the claims requires the hearing of evidence and is not suitable for a preliminary decision.  Therefore, the appeal was accepted, the judgment of this court was annulled, and the hearing was returned to it for the purpose of further clarification of the claim, both on behalf of the company and on behalf of its creditors.
22. In my decision on Application No. 4 to oblige Agrexco's liquidators to deposit a guarantee to secure legal expenses, I decided on December 10, 2023, on the basis of the Supreme Court's rulings, that since the claim is not monetary but rather declarative-preliminary, the claim of complexity due to a "huge sum" is rejected.  In addition, it has been proven that the liquidation fund has sufficient funds (over ILS 10 million) to cover future expenses, and that these expenses have priority over payment as liquidation expenses, which obviates the need for a guarantee under section 353A of the Companies Law, 5759-1999 (hereinafter: the "Companies Law").
23. On December 21, 2023, two motions were filed: the first for the summary dismissal of the claim due to the statute of limitations, and the second for the summary dismissal of the claim on behalf of the creditors. In my decision of February 7, 2024, I rejected both requests.
24. With regard to the first motion, the motion for summary dismissal, I rejected the motion while adopting the Supreme Court's ruling that the statute of limitations began on August 25, 2011. In addition, I emphasized the duty to act with caution in dismissal in limine, and in the circumstances of the case, I imposed punitive costs on the Applicant for filing a frivolous motion, which is contrary to the case law in this case.
25. As for the second motion, I rejected the attempt to dismiss the creditors' claim in limine on the grounds that the assignment of rights was illegal. It was held that in light of the Supreme Court's ruling on the appeal against the dismissal decision, all the arguments, including those relating to section 22 of the Torts Ordinance [New Version] (hereinafter: the "Torts Ordinance"), must be clarified in the framework of the full hearing of the claim, and not by way of preliminary motions that delay its clarification.
26. On January 8, 2025, an expert opinion was submitted by Dr. Uri Ronen, CPA, on behalf of the plaintiffs (hereinafter: "Ronen's Opinion").  On the same day, an affidavit of principal testimony was filed by CPA Giora Lopetig, CEO of Mishmeret Company, which serves as the trustee of the holders of the bonds (Series A) issued by the Company (hereinafter: the "Lopetig Affidavit" and the "Bonds" or the "Bonds", respectively).  On January 9, 2025, an expert opinion was submitted by CPA and Adv. Dror Aviv on behalf of the plaintiffs (hereinafter: "Aviv's Opinion").
27. On May 14, 2025, affidavits of the main witness and an opinion were submitted on behalf of the defendant: an affidavit of Itai Gottlieb, CPA, Head of the Defendant's Professional Department (hereinafter: "Gottlieb's Affidavit"); Affidavit of Mr. Yuval Oren, who served as Chairman of the Board of Directors of Agrexco from the beginning of June 2010 until the end of February 2011 (hereinafter: the "Oren Affidavit"); expert opinion of Prof. Yoram Eden, CPA dated May 9, 2012 (hereinafter: "Eden Opinion 2012"); Expert opinion of Prof.  Yoram Eden, CPA, dated May 13, 2025 (hereinafter: "Eden Opinion 2025"); and an expert opinion of CPA Uri Morad (hereinafter: "Morad Opinion").
28. On May 29, 2025, the plaintiff's witness, Dr. Ronen, was interrogated.  On June 5, 2025, an exhibit was submitted regarding a report by Midroog for the rating of the bond series issued in 2007 (hereinafter: the "Midroog Report").  On June 10, 2025, the witnesses were cross-examined on behalf of the plaintiffs, CPA Aviv and CPA Luftig.  On June 12, 2025, the witness was interrogated on behalf of the defendant, Prof.    On June 30, 2025, the witness was questioned on behalf of the defendant, Mr. Yuval Oren.  On July 6, 2025, the witness was interrogated on behalf of the defendant, CPA Gottlieb.  On July 10, 2025, the expert on behalf of the defendant, CPA Morad, was interrogated.
29. On October 21, 2025, the summaries were submitted on behalf of the plaintiffs. On December 4, 2025, the summaries were submitted on behalf of the defendant.  On December 22, 2025, the summaries of the response were submitted on behalf of the plaintiffs.

The plaintiffs' arguments

1. As to the defendant's liability as the auditor, the plaintiffs claim that the defendant was grossly negligent in fulfilling its role as Agrexco's auditor, by approving and signing financial statements that included a material misrepresentation of the company's financial situation, concealed losses of considerable amounts, and created a false representation of financial stability and compliance with financial standards.
2. It was further argued that the defendant did not act as a gatekeeper as required of an auditor, but rather made do with receiving management representations without conducting an investigative, independent and in-depth audit, even when these were material items that affect the company's equity, the solvency of the company and the rights of its creditors.

• With regard to the accounting handling of payments to the growers, according to the plaintiffs, Agrexco paid the growers "special payments" in cumulative sums of hundreds of millions of shekels, beyond its contractual obligations, without written contracts or legal right to return the special payments, and without the ability to enforce the continuation of the engagement. Despite this, the company recognized a significant portion of these payments as an asset in the financial statements for the years 2007-2009.  According to the plaintiffs, this recognition is contrary to the basic principles of accounting standardization, since it is at most an expectation of continued business relationships, which does not establish a recognizable "asset".

1. It was further argued that the defendant approved this registration even though it knew, or at least should have known, that the company had no control over the alleged resource, that there was no certainty of receiving future economic benefits, and that there was no legal or economic basis for recognition of the asset.
2. With regard to the accounting framework that applies in our case, the plaintiffs claim that as of January 1, 2007, the company is obligated to implement Accounting Standard No. 30 Intangible Assets (hereinafter: "Standard 30"), by virtue of the accounting scale set out in Statement No.  26 of the Institute of Certified Public Accountants, and that the payments to growers, insofar as they can be viewed as an asset, constitute at most an intangible asset, and therefore they should be analyzed in accordance with this standard.  According to the provisions of Standard 30, and in the absence of legal rights or the ability to control supplier relationships, these relationships should not be recognized as an asset.  Since these conditions were not met in Agrexco's case, the payments could not be recognized as an asset.
3. Alternatively, it was argued that even according to the International Financial Reporting Standard (IFRS 15) revenues from contracts with customers (hereinafter: IFRS 15")), these are costs for obtaining a contract that are uncertain and do not depend on the actual achievement of a contract, and therefore they should be recognized as an expense at the time of their formation. The defendant, according to the plaintiffs, approved an accounting treatment that contradicts these clear provisions.

• With regard to the offset, lack of disclosure and non-reservation, the plaintiffs claim that the defendant approved an offset between the liabilities to the growers and the alleged "asset", in a manner that prevented it from being presented on the balance sheet and concealed material information from the readers of the reports. In addition, no disclosure was made of the unusual accounting policy that allowed payments without a contractual basis to be recognized as an asset. Thus, the company's creditors were prevented from understanding that the company's compliance with the covenants relies on assets that are uncertain.
• In these circumstances, it was argued that the defendant should have demanded that the reports be amended, and at least include an explicit reservation or a negative opinion. Signing a "smooth" opinion in these circumstances constitutes, according to the plaintiffs, a breach of the duty of professional care.

1. As to the causal connection and damage, the plaintiffs claim that the improper recognition of the payments as an asset allowed the company to present simulated compliance with the covenants set out in the bonds. If it were not for this registration, the company would have already violated the covenants in the 2007-2008 reports.
2. Violation of the covenants would have required the reclassification of the bonds as current liabilities already in the 2007 financial statements, which would have created a deficit in working capital, required the registration of a "going concern" note, and the cessation of the company's activity at a much earlier stage. The continuation of the company's activity for an additional three years led to the expenditure of additional funds, the accumulation of losses and the deepening of the company's and its creditors' damages.  The plaintiffs claim that this is compensable damage, since this is not ordinary losses from business activity, but rather an improper expenditure of funds that was made possible due to the defendant's negligence.
3. With regard to the status of liquidators and assignment of rights, according to the plaintiffs, the liquidators are authorized to file the claim on behalf of both the company and its creditors, as they are the officers of the court and the trustees of all the creditors. The assignment of the rights from the creditors was made lawfully and with the approval of the insolvency court, and constitutes an assignment by virtue of the law that is not prohibited under section 22 of the Torts Ordinance.  Its purpose is to centralize the proceedings and increase the oblivion fund, and it does not constitute improper commercialization of claims.

• Finally, with regard to the statute of limitations and delay, the plaintiffs claim that the statute of limitations began at the earliest with the submission of Barlev's opinion in August 2011, when the material flaws in the reports were first exposed. In addition, the defendant agreed in 2018 to stop the statute of limitations for the purpose of conducting negotiations, and this agreement applies to all the components of the claim. As to the delay, it was argued that there was no proof of a waiver of a right, a change for the worse in the defendant's situation, or a lack of good faith on the part of the liquidators.

The defendant's arguments

1. As to liability and negligence on the part of the defendant as the auditing accountant, the defendant argues that the claim should be dismissed, since no negligence, breach of professional duty or deviation from the audit standards that apply to an auditor accountant has not been proven. According to the plaintiff, the financial statements that are the subject of the lawsuit are Agrexco reports, which were prepared and signed by the company's management and organs, and the defendant's responsibility is limited to auditing the reports and not in determining business or accounting policy.
2. The defendant emphasizes that there is no dispute that the company's management, headed by the CEO, determined the accounting policy, and that it was not claimed, and even declared in other proceedings, that the CEO or management acted fraudulently or in bad faith. Therefore, according to the defendant, it cannot be attributed liability for the adoption of a management policy that was determined in good faith, when it has not been proven that the policy clearly deviated from the standard or the accepted professional practice at the relevant times.

• As to the accounting policy, the defendant claims that this policy of recognizing payments to growers as an asset was not "born" in the years 2007-2008, but was implemented at Agrexco for decades earlier, at least since the late 1980s. The policy was known, consistent and open, reported to the company's board of directors, approved by the balance sheet committee, and also implemented by previous accounting firms that audited the company's reports.

1. According to the defendant, the fact that the plaintiffs refrained from suing the previous accountants, and even chose to "cut" the 2006 data from their expert opinions, strengthens the conclusion that this is not an unusual or improper policy. It was further argued that it cannot be argued that the policy was intended to "engineer" compliance with the covenants, while it was in practice for many years before the issuance of the bonds and without any connection to it.
2. As to the legality and reasonableness of the accounting handling of payments to growers, the defendant claims that the payments to the growers were not "gifts" or payments without consideration, but rather advances and business incentives intended to ensure the supply of future produce and to ensure the continuity of the company's activity. According to her, many years of experience have proven that these incentives did indeed create future economic benefits, in the form of the trusteeship of the growers and the continued supply of produce, and therefore it was a legitimate economic asset.
3. The defendant emphasizes that accounting standards do not necessarily require the existence of a written contract, and that even de facto control, based on stable business relationships and a reasonable expectation of economic benefits, may justify recognition of the asset. It is argued that international standards (including IFRS 15) and the US recognize the possibility of recognizing assets deriving from the costs of obtaining contracts or retaining customers, even in the absence of a signed contract, where there is a well-founded expectation of future benefits.

• It was further argued that the company had no interest in "inflating" assets, since from a tax perspective it would have been preferable to recognize the payments as an immediate expense, which indicates the good faith of the policy. The deletion of the property in 2011, according to the defendant, was not an admission of error in the previous reports, but rather a response to a radical change in circumstances in the form of the abandonment of towers, regulatory uncertainty and a change of management, which necessitated a re-examination of the recoverable amount (the maximum value that the company can derive from the property).
• With regard to the applicability of Standard 30 and international standards, the defendant argues that Standard 30 does not apply to the case, since it concerns intangible assets purchased from third parties, and not with an ongoing supplier-customer relationship.

1. Alternatively, it was argued that even if the standard applies, it does not absolutely prohibit recognition of an asset in the absence of legal rights, and that the standard allows recognition of intangible assets even on the basis of the expectation of economic benefits, as is done in business combinations (a transaction in which a purchaser obtains control of another business).
2. The defendant adds that in a situation where there was no specific Israeli standard at the relevant time, IFRS 15, which came into effect in 2014, should be invoked, as it reflects the practice in force even at the relevant time of the claim and supports the practice adopted by the company.
3. With regard to the claims of offset and disclosure, the defendant admits that it is possible that the data could have been presented in a different way or that a broader disclosure could have been given, but according to the defendant, these are technical or classification defects that are not material. It was argued that the offset between the asset and the liabilities did not affect the company's equity, and therefore it did not change its compliance with the covenants or mislead the users of the reports.  In these circumstances, there was no professional justification for granting a reservation or a negative opinion, and the defendant acted in accordance with reasonable professional judgment.

• It was also claimed that the Government Companies Authority and the company's new management continued to adopt the same accounting policy in later reports (2009-2010), which indicates its correctness in real time. The liquidators themselves did not re-present the past reports, a fact that testifies to the defendant's position that they did not believe that this was an accounting error.
• With regard to compliance with the audit standards, the defendant claims that the audit work was carried out in accordance with the applicable auditing standards, while collecting adequate audit evidence and examining the advance balances. It was further argued that the expert opinion on its behalf, CPA Morad, is the only professional opinion in the case that directly relates to the manner in which the audit was performed, and determines that there was no defect in the defendant's work. It was argued that the plaintiffs' experts are not audit experts, but theoretical accounting experts, and that their audit is directed at the accounting result and not at the audit process itself.
• As to the causal link and damage, the defendant claims that Agrexco's collapse stemmed from external factors and the state's policy as a controlling shareholder, including an uneconomic business model, thin financing and abandonment of the company, and not from the accounting handling of payments to growers. It was argued that the element of reliance had not been proven, since the creditors relied on the state's involvement and not on the opinions of the accountants, and some of them did not even review the financial statements.

1. It was further argued that the alleged damages were creditors' damages only, and not independent damages of the company. Losses arising from the continuation of normal business operations or closing costs would have been incurred at any time of the collapse. According to the defendant, the legal causal connection was also ruled out, since the alleged damage is not within the scope of the expected risk of an auditor who acts in accordance with the standards and approves a policy approved by the management and the regulator.

• As to the statute of limitations for the company's claim, the defendant claims that the cause of action arose with the publication of each of the financial statements in respect of which negligence is alleged, in 2010 at the latest. The knowledge of the CEO, the Chairman of the Board of Directors and the entire board of directors of the accounting policy is equivalent to the knowledge of the company itself, and therefore the statute of limitations began many years before the lawsuit was filed. Since the liquidators themselves claim that these organs acted in good faith and that "their hand was not in the upper hand", the defendant argues that their knowledge should be attributed to the company for the purpose of starting the statute of limitations, since it is the knowledge of "innocent" elements in the company, who could have discovered the facts with due diligence.
• With regard to the limitation of the creditors' claim, the defendant claims that the creditors, and in particular the bond trustee as a "relevant party", could have known about the accounting policy and risks as early as 2007, from the financial statements and the reports of Midroog. A "lead" or a reasonable suspicion is enough to start the statute of limitations, and there is no need for full knowledge or unequivocal evidence.  Therefore, the claim on behalf of the creditors became statute of limitations in 2017 at the latest.
• With regard to the delay and evidentiary damage, the defendant claims a significant and unreasonable delay in filing the claim, which caused it actual evidentiary damage, including the death of the chief bookkeeper and the loss of documents. In these circumstances, it was argued that the claim should be dismissed or at least the defendant should be lenient on the evidentiary level and the burden of proof imposed on the plaintiffs should be increased.
• With regard to the assignment of rights, the defendant argues that the assignment of the rights of the claim from the creditors to the liquidators is contrary to the provisions of section 22 of the Torts Ordinance and is not valid. It was argued that the checks were not expressly approved in advance by the insolvency court, that some of them were made after the statute of limitations, and that some of the creditors did not have the right to assign at all. It was further argued that the salary structure of the liquidators, which is derived from the scope of the compensation, creates a concern of improper commercialization of tort claims.

The Plaintiffs' Response to the Defendant's Claims

1. With regard to the responsibility of the company's management and the long-standing policy, the plaintiffs reject the defendant's claim that the accounting policy was determined exclusively by the company's management and that liability should not be attributed to the defendant. According to them, the mere fact that the policy is old does not constitute an instrument for incorrect accounting treatment.  An auditor is obligated to examine every year the compatibility of the reports with the standard and the economic reality.  It was argued that even if the company's management acted in good faith, this does not exempt the defendant from its professional duty to audit, warn and have reservations where the reports do not faithfully reflect the company's situation.
2. As for regulatory approval and the claim of legality, the plaintiffs reject the claim that the Government Companies Authority approved the accounting treatment. It was argued that no such positive confirmation was presented, and that in any case the Authority does not have the authority to establish accounting rules.  It was further argued that the mere adoption of the policy even in later reports does not indicate its correctness, but at most indicates the continuation of the misrepresentation.

• As for the causal connection and the imposition of liability on the state, the plaintiffs claim that there is no contradiction between the claims against the state and the claim against the defendant. While the state is sued for the very business model and the collapse, Kost Forer is sued for preventing the disclosure of the collapse at an earlier date.  It was argued that the defendant's role was not to prevent the collapse, but to reflect an accounting truth.  Failure in that it allowed the artificial extension of the life of society and the deepening of the damage.

1. With regard to the statute of limitations, delay and evidentiary damage, the plaintiffs reiterate that they did not have a real "clue" prior to Barlev's opinion, and that the knowledge of organs involved in the preparation of the reports does not activate the statute of limitations against the accountants. With regard to the alleged evidentiary damage, it was argued that the defendant herself is obligated to keep labor papers for a long period of time, and their absence acts in her duty and not the plaintiffs' obligation.
2. As for the assignment of rights, the plaintiffs reject the claim of prohibited assignment. According to them, this is a check that was made as part of the insolvency proceeding, with the approval of the court and with the aim of maximizing the obligation fund, and therefore the rule that allows the check by virtue of the law applies to it.  It was argued that there is no concern about the commercialization of claims, and that preventing the investigation of the claim will lead to an unjust result whereby the tortfeasor will benefit from the insolvency of the injured party.

Discussion and Decision