"From the date of the issuance of the order [for the commencement of proceedings - H.B.], an entity conducting an insolvency proceeding should be regarded as a different and separate entity from one that encountered financial difficulties prior to the date of the order. After all, the company in its format does not move from the date of the issuance of an order to open proceedings that has dealt with its debts, just as the company is in the midst of an insolvency proceeding or which has embarked on a new path and is working to rehabilitate it according to an economic rehabilitation plan. The first of them - which was managed by its original directors and collapsed financially - was "frozen" upon the issuance of the order, and in its place a new entity was established - which is effectively managed by the trustee (section 43 of the law). Even if technically the two entities bear the same name, they are fundamentally different and distinct from each other."
Therefore, the assessment should have been made to the trustees, and not to those who were officers of the companies in the past.
- Worse still, it seems that Traffic Devices identified a "business opportunity" and decided to take advantage of the fact that Direct Import was in insolvency proceedings in order to reap a franchise that was not its own. And to be precise. Direct Import owned a franchise for the marketing of private vehicles made by JAC, even before it entered into an agreement with Traffic Devices for the purpose of obtaining an additional and separate franchise for the marketing of trucks. Givton admitted that Direct Import turned to traffic devices under the assumption that since it holds a franchise for private vehicles, both parties, in a joint effort, will be able to obtain a concession for trucks as well (p. 6, verses 6-10 of the transcript). And now, as it appears from Gabton's confession in his interrogation, since the insolvency proceedings began, Traffic Devices has been in direct contact with JAC behind the backs of the trustees, even though the trustees still hold 40% of the shares of the Sino-Israel company (pp. 6-7 of the minutes). Furthermore, Gavaton added that Traffic Devices is currently working to obtain a concession to import vehicles made by JAC. From the context of the matter, it was possible to understand that this was a concession for the marketing of trucks, i.e., the same franchise held by the China Israel company, but during the course of the discussion it was discovered for the first time that Traffic Devices was in advanced negotiations to sign a deal with the manufacturer - which would turn it into a distributor of private vehicles made by JAC in Israel (instead of direct imports) - contacts that began shortly after the cancellation letter was sent:
"A: After the cancellation notice, we informed JIC that we had an interest in becoming a distributor of JIC... in motion devices.