Caselaw

Civil Case (Tel Aviv) 51721-03-20 Dr. Shlomo Ness v. Kost Forer Gabbay Consolidation of Claims Kassirer - part 42

February 19, 2026
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A:             Okay.

Q:             And you tell me so, and I just want you to tell me, I'm sure you told the truth but I want to hear it from you, you say this - "In the meeting that took place on Tuesday", apparently before that 23.6.11, "a long discussion took place, in which it was made clear to the company that the bondholders invested in the company solely because of the involvement of the state and that the holders had no interest in the capital", confirm to me with your kindness that you told the truth, you told the company - the bondholders invested in this company solely because of the involvement of the state, and therefore there is also no point in raising a flag or Not a flag, we trust the state, as you said earlier - the state will invest, save, etc., right?

A:             That's what the owners told the company.

Q:             "The owners told the company," they didn't lie.  That's what they thought, they didn't lie to society.

A:             I guess they didn't lie."

  1. Moreover, the trustee received real-time reports that included unusual and clear warnings regarding the company's status and its ability to comply with the covenants, but did not "raise a flag" or convene a shareholders' meeting. The fact that the trustee did not act even when Midroog warned of "the likelihood of non-compliance with financial standards that constitutes grounds for immediate repayment" indicates that accurate accounting records would not have led to immediate repayment.  Thus, for example, it appears that no red flag has been raised regarding the effects of the cold of 2008 on the scope and quality of agricultural produce and on the company's business results (Protocol, p.  619, paras.  3-22).  In addition, it appears that the trustee confirmed in his interrogation that even in light of the inclusion of Agrexco bonds on a watch list, a meeting of bondholders was not convened (Transcript, p.  624, questions 13-18):

"In October 2008, Midroog informed the company that Madrog was adding the company's bond rating to a watchlist due to a combination of developments in its business environment that led to a deterioration in its financial results", please confirm to me that after this publication you did not raise any flag, you did not even convene the bondholders.

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