Stop (Tel Aviv) 21631-10-25 Global Auto Max Ltd. v. The Director-General, Financial Case – Supreme Court, Insolvency and Economic Rehabilitation Proceedings

Decision

Regarding an application - urgent - for the issuance of instructions dated January 11, 2026

Introduction

1. I have before me a request for instructions submitted by the trustees to the companies of the Automax Group (the "Trustees" and the "Companies", respectively).
2. In the original application, the court was asked to instruct the Respondent, which is the Traffic Devices and Cars Company (2004) in a tax appeal ("Traffic Devices"), to provide the trustees with various documents requested by them; Extend the deadline for submitting an application for the continued performance of an existing contract; and to issue a temporary injunction instructing Traffic Devices not to contact the Chinese automobile manufacturer Anhui Jianghuai Automobile Group Corp., Ltd. ("JAC" or the "Manufacturer"), not in accordance with the founders' agreement entered into between the parties, until the expiry of the extended deadline for submitting the application for the continuation of the existing contract.
3. At the end of the hearing held on the application, the trustees clarified that they no longer stand on all the remedies requested in the application, except for the issuance of a permanent injunction (in a temporary place that has already been granted) prohibiting traffic devices from contacting the manufacturer regarding private vehicles (p. 21 of the minutes, paras.  33-35).  With regard to the trucks, it is requested that the contact be made only in coordination and cooperation with the trustees in accordance with the provisions of the founders' agreement.  In addition, an order instructing traffic devices to produce all correspondence exchanged between it and the manufacturer as of the beginning of September 2025 in all media, including through WeChat (a Chinese application for exchanging messages similar to the WhatsApp application).  Traffic Devices did not announce its objection to the change in the relief requested by the trustees from a temporary injunction to a permanent injunction.  This request for a permanent injunction, and not only temporary, was also reiterated by the trustees in completing the written argument.  This time, too, Traffic Devices did not announce its objection to the change in the procedural format of the original application.

Factual Background

4. The Ottoman Settlement [Old Version] 1916 Insolvency proceedings were opened in October 2025 following a criminal investigation by the Israel Securities Authority against officers of the companies, which even led to the arrest of some of them.
5. 12-34-56-78 Chekhov v. State of Israel, P.D.  51 (2) Moving on to the economic collapse of the companies, they dealt mainly with the parallel import of vehicles to Israel, the import of buses from China, as well as the purchase and sale of used vehicles (trade-in).
6. On October 21, 2025, a stay of proceedings order was issued to some of the companies in the Automax Group, and the trustees were appointed as temporary trustees.
7. On November 4, 2025, a stay of proceedings order was issued to Automax Direct Import in a tax appeal ("Direct Import"), and the trustees were appointed as its temporary trustees. On November 10, 2025, an order was issued in the matter of direct imports to open proceedings and appoint temporary trustees in reverse permanent.  Direct Import is part of the Automax Group and served as a vehicle importer pursuant to an agreement for the marketing and distribution in Israel of private vehicles manufactured by JAC.
8. As the proceedings progressed, the trustees were appointed permanent trustees in relation to all the companies in the group.
9. On February 20, 2025, eight months before insolvency proceedings were opened against the companies, a founders' agreement was signed between Direct Import and Traffic Devices (the "Agreement") for the purpose of establishing a joint venture company, namely the China-Israel Vehicle Company in a Tax Appeal (the "China-Israel Company"). This company is intended to import and market in Israel M3 and N3 trucks and heavy vehicles manufactured by JAC, including related products, in accordance with a franchise agreement signed with the manufacturer on July 30, 2025 (the "Franchise").  It should be clarified that this is a different and separate franchise from the marketing and distribution rights of private vehicles in Israel, which Direct Import had previously received from the manufacturer.
10. The agreement was conditional on three conditions: obtaining the regulatory approvals required for the establishment of the joint venture; granting a franchise to the Sino-Israel company by the manufacturer; and obtaining an importer's license for the manufacturer's products (the "Import License"). The agreement also stipulated that if the suspension conditions or part of them are not met within 120 days, and as long as the parties have not waived their existence or agreed to postpone the date set for their existence, then either party will be entitled to cancel the agreement.
11. It should be noted that even before the agreement was signed, on December 11, 2024, Traffic Instruments signed a letter of commitment to Global Automax in a tax appeal and to direct imports (the "Letter of Undertaking"). In its framework, Traffic Devices undertook, inter alia, not to abuse the information it received from the companies for the purpose of conducting competing activity or for the purpose of contacting the manufacturer outside the framework of the transaction between the parties.
12. On July 14, 2025, a meeting of the Board of Directors of China Israel was held, at the end of which it was decided, inter alia, to approve the franchise agreement between the manufacturer and China Israel. The problem is that until this moment, the Sino-Israel company has not received an import license for trucks and heavy vehicles made by JAC.
13. Copied from NevoOn November 16, 2025, Traffic Devices sent a letter to Mr. Tomer Levy, one of the officers of Direct Import, announcing the cancellation of the agreement due to the non-fulfillment of the suspension condition relating to obtaining the import license on the date set in the agreement. In practice, the cancellation notice was received by the trustees only on November 26, 2025.
14. On December 3, 2025, the trustees sent a letter to Traffic Devices in which they claimed that the cancellation of the agreement was subject to the provisions of subsection B of Chapter 7 of the Insolvency and Economic Rehabilitation Law, 5778-2018 (the "Law" or the "Insolvency Law"). The trustees also demanded that certain documents relevant to the cancellation notice sent by traffic devices be transferred to them, by virtue of section 47 of the law.
15. On December 15, 2025, Traffic Instruments replied to the trustees and noted that in its opinion, subsection B of Chapter 7 of the Insolvency Law is irrelevant because the agreement was not canceled because of its breach, but rather because of the non-fulfillment of the suspended condition.
16. Hence the application before me, which was filed on January 11, 2026.
17. Upon submission of the application, a temporary order was issued prohibiting traffic devices from contacting the JAC in a manner other than in accordance with the provisions of clause 16.3 of the agreement, until a different decision is made.
18. A hearing on the application was held on February 2, 2026. At the beginning of the hearing, counsel for Traffic Devices noted that close to the date of the hearing, a notice was received from the manufacturer stating that it was canceling the concession agreement between it and China Israel (although it appears that this was a warning before it was actually canceled).  As part of the hearing, the declarant on behalf of Traffic Devices - Mr. Itamar Givton - who serves as a director of China Israel Traffic Devices ("Givton"), was interrogated.  At the end of the hearing, an order was issued to complete the written arguments.

The Parties' Arguments in the Framework of the Completion of the Argument

19. The trustees claim that Traffic Devices has a valid undertaking not to contact the manufacturer in matters of private vehicles, by virtue of the provisions of the letter of undertaking signed by Traffic Devices, which prohibits it from abusing the information it receives for the purpose of conducting competing activity with companies or for the purpose of contacting the manufacturer outside of the deal they signed in the matter of trucks. It was claimed that Gavaton admitted in his interrogation that Motion Devices was unable to obtain any concession from the manufacturer on its own, and therefore it chose to do so by means of direct imports.  Therefore, any application of traffic devices to the manufacturer in connection with a franchise involving private vehicles and the attempt to take over the concession of direct imports, while taking advantage of the connection created by the companies for traffic devices, constitutes a blatant breach of its obligation under the letter of undertaking.  According to the trustees, this undertaking is still valid because the letter of undertaking has an independent validity for five years, which is not contingent on the question of whether or not a founders' agreement was signed after it.

The trustees further claim that Traffic Devices has a valid undertaking not to contact the manufacturer in accordance with the provisions of the agreement.  It was argued that clause 16.3 of the agreement prohibits traffic devices, as long as it is a shareholder in China-Israel, from soliciting or causing the termination of the engagement with JAC, and that this prohibition will apply for 60 months after the termination of the holding of shares in China-Israel.