Civil Case (Tel Aviv) 40568-01-23 Alon Goldstein et al. v. MHR Investment Management Ltd. - part 2

The Applicants' Arguments in Their Summaries

22. At the beginning of their summaries, the Applicants discuss the duties of trust and increased transparency that apply to the fiduciary relationship between partners in general, and between a general partner and limited partners in a limited partnership in particular, which means, according to the claim, in the circumstances of our case, that the dissolution of the partnership should be ordered.
23. The Applicants claim that the Respondent admitted to all the serious factual claims raised in the liquidation application, and that during the course of the hearing, the trust between the general partner and the limited partners completely crumbled, after it became clear that "not a single word from the general partner could be believed, and that the facts discovered during the hearing and other documents that were presented were even more serious than the applicants were known at the time the liquidation application was filed."
24. According to them, the rule is that a loss of trust - in itself - constitutes an independent cause of action that alone is sufficient to lead to the dissolution of the partnership (regardless of whether it is solvent) and in view of the fact that a relationship of trust is the basis without which the partnership cannot exist, a breach of trust is sufficient to justify the dissolution of the partnership, as appears from the provisions of sections 45(4) and 45(6) of the Partnership Ordinance.
25. In our case, it was argued, each of these grounds is sufficient to justify granting the application, since the general partner not only violated the partnership agreement when he pocketed money behind the investors' backs in contravention of the provisions of the agreement, but also acted in a clear conflict of interest, when he secretly appropriated for himself no less than 25% of the rights in the property as well as a significant portion of the investment funds, and this too "in deceit and concealment".
26. According to the applicants, in addition to the loss of trust between the partners, there was also a cause for dissolution of the partnership "for reasons of party and honesty", since we are dealing with an exceptional case of the severity of a general partner who betrayed, stole and defrauded the limited partners in the partnership from its first day, "and it seems that it is difficult to imagine a more suitable case for liquidation for reasons of justice and honesty".
27. According to the applicants, it was proven that the general partner took from the investment funds of the limited partners by way of collecting a brokerage fee that was hidden from their eyes. The respondent's version that it was a success fee by virtue of the agreement collapsed when in the invoice issued by the respondent itself it defined the amount as "brokerage fees" and while the respondent's own witnesses admitted during their testimony that the funds taken by them constituted brokerage fees and not success fees.  With regard to the additional, new version, which arose during the testimony of Mr. Yagil Manovich, according to which the brokerage fees that the Respondent pocketed were not success fees that she claimed she was entitled to under the agreement (as opposed to her first version in her response to the liquidation request), but rather brokerage fees, when in fact the Respondent received a lower sum because the invoice she issued for the brokerage fee also included additional expenses, it was argued that it is inconsistent not only with the defense's argument in response to the liquidation request and with the invoices issued by the Respondent herself (which do not mention any expense other than brokerage), but it also cannot stand since the respondent has not presented documents or other evidence in relation to the amount of the additional expenses.
28. The Respondent's version that the investors were not at all interested in the question of how much the Respondent was taking into her own pocket was also not substantiated since the Respondent did not present a single reference to support its claim, as was the Respondent's version that the taking of the funds through Germany was concealed from the Applicants because they were "only" limited partners.
29. According to the Applicants, the brokerage fees collected by the Respondent cannot in any way be considered as success fees under the Agreement. The respondent's salary was arranged in advance in clause 5.3.1 of the agreement (which determined its right to receive 10% of the rent) and in clause 7.2 of the agreement (which determined its right to receive 10% of the profit after realization) - which are the success fees that were presented to the investors in writing and in a criminal appeal, and there is no exception.  On the basis of the aforesaid, it was argued that there is no basis for the claim that clause 5.2 of the agreement entitled the Respondent to payment of "success fees" at an unlimited rate, in addition to a success fee of 10% derived from the profits in the transaction.
30. According to the applicants, in accordance with the partnership agreement, the respondent should have provided the investors with financial statements that would ensure full transparency. The crooked way in which the payments were made through the German partnership and not through the Israeli partnership was clearly intended to conceal the brokerage fees from the financial statements exposed to the eyes of investors, who did not receive any other report.
31. According to the applicants, the fact that this was done behind the backs of the limited partners - in itself justifies the dissolution of the partnership in view of the complete loss of confidence in this matter.
32. In addition, the Applicants claim, it was proven that the General Partner received rights in the property at the rate of 25% behind the backs of the investors, in blatant violation of the duty of disclosure and trust imposed on him by law, and after the Respondent presented the investors with a representation that the total equity required of the investors is €2,767,000, in exchange for taking ownership of 50% of the property, while the remaining 50% remains in the hands of a local partner, The person responsible for the ongoing maintenance of the property. In this matter as well, it was argued, the facts were not denied by the respondent, who admitted that she had received 25% of the rights in the property; Both by not paying any real consideration for these rights and by hiding these facts from investors.
33. In addition, it was argued that the Respondent's version of defense in its response to the liquidation request, according to which taking 25% of the profits in the property into its hands benefited the "Israeli side", is not only unfounded on its face, but is also an additional attempt to mislead the court that in any case these are rights to "profit" and not shares that grant voting rights in the German partnership or in the Dutch company.
34. In addition, it was argued that even in the Respondent's new version, according to which this matter has nothing to do with the investors at all, it cannot be disputed that the General Partner must be transparent regarding the benefits he receives from the transaction, and in particular since the Respondent saw fit to present information on the subject to the investors. In addition, it turned out that the presentation presented to investors in the presentation, according to which Mueller receives 50% of the property for the handling of the property's maintenance, was false from start to finish.
35. In addition, it was argued that it was proven that the respondent in its response to the liquidation request presented a false version regarding the differences between the amount of the investment in the partnership and the investment in the German partnership, while in the liquidation request the applicants claimed that the general partner presented them with a representation according to which an equity investment of ₪2.7 million would be required in order to receive 50% of the rights in the property, but a review of the partnership's financial statements revealed that the investment of the limited partners amounted to ILS 19,732,312. which were equivalent to about €4.6 million.  On the other hand, it turned out that only about €3.57 million was transferred to Germany, so that there is an unexplained gap of about €1.04 million that was raised from investors but was not invested in the property in Germany at all.  In this context as well, it was argued, the Respondent admitted the main facts that are the subject of the liquidation request: that is, that there is indeed a gap between the amount raised from the investors and the amount invested in the property in Germany, but that according to it, it is only about €852,000.  Either way, the Respondent did not present a single reference for all the alleged expenses, and this is sufficient to reject the Respondent's claim that it did not meet the burden imposed on it to show what was done with the amount that was not transferred to Germany.
36. In addition, the Applicants claim that on January 17, 2024, following an examination of the Respondent's witnesses, the Court instructed the Respondent to submit all the invoices that it issued to the Limited Partnership in respect of the transaction, but what was attached by it were invoices that it issued to the Dutch company, and none of which has any indication or hint linking them to the Fit 6 Partnership specifically.
37. According to the applicants, the sad conclusion that arises from all the documents placed in the court file is that the respondent illegally took €458,000 for "brokerage fees" through the German partnership; In addition, it took the lion's share of what it called "establishment expenses" in its financial statements in the amount of €1.045 million of the investment funds, disguising it through the Dutch company; All of this is in addition to the 25% of the rights to profits from the property, which the respondent received from Mueller behind the investors' backs.
38. The aforesaid, it is argued, leaves no doubt as to the need to dissolve the partnership and appoint a liquidator who will control the funds in place of the respondent. The Respondent proved that it is not worthy of trust, that it hides material information from the eyes of the limited partners, that it does not hesitate to act in a conflict of interest, while harming the interests of the investors, violating the duties of transparency and trust, and stealing from their pockets for its personal benefit behind their backs.
39. According to the Applicants, the Respondent's claim regarding "enormous damage" that will be caused as a result of the appointment of a liquidator is a "storm in a glass of water" since the Israeli partnership is not a party to the proceedings in Germany at all, and in any case its dissolution will have no impact on the continuation of the proceedings in Germany. The German partnership of Kaiserslautern, in which the limited partnership invested, is also not a party to any legal proceedings in Germany.  Finally, even if we assume that all that remains is to continue the legal proceedings against Mueller, in the absence of trust in the Respondent, there is no longer any justification for allowing it to continue to manage the Partnership's business, and the Applicants are also not interested in entrusting it with the management of the proceedings against Muller.
40. In addition, the Applicants claim, it was proven that the General Partner unlawfully prevented the transfer of the proceeds of the sale of the property to the limited partners, and that there is a real concern that the proceeds from the sale will be used for the purposes of other partnerships managed by the Respondent.
41. Finally, it was argued that despite the pressure exerted by the Respondent on the other limited partners, only five partners agreed to sign the text of the objection dictated by the Respondent, four of them without any supporting affidavit, while no less than 17 affidavits of additional partners were submitted in support of the liquidation request, so that out of 57 limited partners in the partnership, 40 supported the liquidation request and only 5 objected. In other words, the vast majority of the partners are interested in liquidation.

The Respondents' Arguments in Their Summaries

42. According to the respondents, the investment in the limited partnership was a very successful investment by any standard, taking into account that the applicants had already received returns of about 60% (10% every year from 2016-2021), and the property was sold for €10.8 million, which leaves a huge profit for the applicants and the other investors. However, instead of assisting the respondents in bringing the funds to Israel and distributing them immediately, the applicants cooperate with Mueller and act only to bring down the respondents.
43. According to the respondents, after the sale of the property, the company tried and is still trying to distribute the balance of the funds to the investors, but Muller, with whom the applicants are cooperating, refuses to do so, and the applicants refuse any solution in order to bring the funds to Israel and distribute them immediately.
44. In their summaries, the respondents claim that the cause of "loss of confidence" on which the application is based has not been proven, inter alia, because loss of confidence is an objective claim based on subjective foundations and that the application was based on a single testimony of applicant 1, which cannot lift the burden of loss of confidence on the part of all the applicants, and in particular since it was found that the declarant did not know the other applicants, did not meet them beyond a Zoom call. He does not know whether the remedy he is requesting will help him or not, or what is the significance of appointing a liquidator, including who is sought to be appointed as a liquidator.
45. According to the respondents, by virtue of the principle of good faith that applies to the use of rights, it is necessary to examine whether it is not possible to suffice with a less predatory and extreme remedy than the liquidation remedy and that in our case the applicants did not relate at all to the possibility of using a less extreme remedy and even categorically refused an arrangement by virtue of which the funds could have been brought to Israel and transferred to the investors, in a manner that attests to the lack of good faith of the applicants who act for foreign motives and lack of cleanliness. In our case, it was argued, the remedy of liquidation and the appointment of a receiver would not only be useless, but would only worsen the situation of all the parties involved, and especially of the applicants themselves, with the exception of Muller, who would benefit from it.  Alternatively, it was argued that even if the court accepts the applicants' arguments, it is possible to suffice with less predatory remedies, such as the appointment of an observer or the issuance of an order prohibiting disposition of funds that will arrive in Israel, the deposit of the funds in the court's coffers or in a trust account of the parties' attorneys, and more.
46. As to the lack of good faith of the sole declarant on behalf of the applicants, it was claimed that he tried to conceal the fact that he had carried out very comprehensive checks before making the investment by consulting with two lawyers, and that he asked many questions about the investment in order to understand in depth the relationship into which he was about to enter. Only after the investigation revealed correspondence between the declarant and the company's representative, Amir Insursky (M/1 and M/2), did the declarant admit that he had done very thorough checks before the investment, consulted with lawyers and fully understood that he was receiving funds (beyond the returns) only after all the expenses of the partnership were paid in accordance with clause 5.2 of the agreement, including success fees and brokerage fees, and that he understood that the rate of success and brokerage fees was at the rates accepted in such engagements.
47. According to the respondents, clause 9.2 of the partnership agreement states that it will be dissolved "only" in the cases detailed therein, including a decision by the general partner to dissolve the partnership, on the part where an order will be issued to dissolve the general partner, the appointment of a receiver over the assets of the general partner, or if the general partner is declared insolvent. In our case, it was argued, none of the conditions listed in the partnership agreement on which the applicants themselves rely are met, and therefore the applicants have no grounds for dissolving the partnership, and in particular since the provisions of the Partnership Ordinance are dispositive, so that the consent of the parties as detailed in the agreement must be respected.  According to the Respondents, it is clear that clause 9.2 of the partnership agreement constitutes an explicit provision in the agreement, or at least indicates clear circumstances that establish such an intention.  Therefore, and only for this reason, it was argued, should the main application be rejected.
48. According to the Respondents, the entire present proceeding was born out of sin, since the Applicants took a proceeding in accordance with Regulation 54 of the Civil Procedure Regulations, 5779-2018, instead of filing a lawful civil suit, in a manner that severely violated their supra-constitutional right to access the Respondents' courts. This, it was claimed, was done by the applicants consciously and deliberately, while the company and its managers were busy dealing with the futile claims of those applicants (or at least some of them) in an application for an order to open proceedings under the Insolvency Law, which was rejected while charging the applicants with expenses, as well as an appeal that was filed with the Supreme Court.
49. According to the Respondents, there is no dispute that the Applicants and/or their counsel are in continuous and close contact with Müller, who feeds them false information and they are operated by him as a "puppet on a string", the same Müller in respect of whom it was determined by the German courts that he was a fraudster who stole the sum of approximately €11 million from the partnerships. According to the respondents, despite the fact that Müller, as emerges from a series of decisions of judicial courts in Germany and the Netherlands, is the wrongdoer who deliberately harmed the companies held by the Dutch company while illegally exploiting his control, the applicants and their counsel are acting together with him.  This is, according to the respondents, absurd, and when a person acts in a manner that is contrary to his interest, this raises questions about the cleanliness of his hands.
50. According to the respondents, we are dealing with a limited partnership and not a regular partnership, and there is no deadlock that prevents the partnership from advancing its interests. On the contrary - the affairs of the partnership are vigorously and successfully promoted by the general partner, and in any case all the actions that remain to be carried out are mainly related to the transfer of the partnership funds to Israel, and when there is an order issued by the court that protects the applicants' funds.  The respondents further argue that there is an abysmal difference between a "regular" partnership and a limited partnership as in his case, in a manner that degrades all the claims of the applicants, since in a limited partnership there can be no deadlock at all since all the management decisions are in the hands of one party - the general partner.  According to the respondents, in accordance with the case law, in order for the court to make use of such an exceptional and extreme remedy, two cumulative conditions must be proved.  First, because the relationship of trust has been damaged; and second, that the actions of the partner are inconsistent with his duties as a partner.  Alternatively, the case law determined that it is necessary to prove three other cumulative conditions, namely that there is a danger to the partnership's assets, that the partner behaved inappropriately, and that the danger to the partnership's assets is due to the partner's inappropriate behavior.
51. In his case, it was argued, we are dealing with artificial distrust stemming from the fact that the applicants act as Müller's long arm and are fed by his. In any event, it was argued, it was not proven that "the actions of the partner are inconsistent with his duties as a partner".  According to the Respondent, the main dispute, according to the Applicants' own approach, revolves around the claim that MHR was not entitled to collect fees and/or expenses and/or success fees as it actually charged.  On the other hand, according to the respondent, all of her actions as a general partner were open, known and transparent, both in advance and throughout the entire process, and the general partner was also entitled to collect all the sums collected by him.  The Respondents further argue that the Applicants did not claim and did not declare that if they had known in advance each of their current artificial claims, then they would not have entered into the partnership agreement in the first place, and that a claim of loss of confidence in partnership relations is likened to a claim of a fundamental breach on the contractual level, or at least a claim of misrepresentation, so that the Applicants should have claimed and declared that if they had known before signing the partnership agreement, what they claim would have been discovered to them only retrospectively, Then they would not have entered into a partnership in the first place.
52. On the basis of the aforesaid, it was argued that at most we are dealing with a relatively marginal financial dispute in terms of its scope, in relation to the collection of commissions by the company, and it is clear that such an honest dispute does not satisfy the second cumulative condition according to which the partner's actions are inconsistent with his debts.
53. The second alternative that was determined in the case law also does not exist in our case, since it has not been proven that there is improper conduct on the part of the company (since it has been proven that the damages caused to the partnership were caused as a result of Müller's misconduct), since it has not been proven that there is a danger to the partnership's assets, and in light of the aforesaid, there is no need to examine the third cumulative condition for a causal connection between the inappropriate conduct and the danger to the partnership's assets. In our case, it was argued, there is at most an honest dispute in good faith with respect to the sums collected by the company, and this dispute does not and cannot lead to the conclusion that this is theft.  In addition, and most importantly, it was argued, the condition according to which the practical possibility of continuing to manage the partnership business was not met.  In this regard, it was noted that the Applicants based their argument on a series of judgments that are irrelevant to our case, since they deal with companies or partnerships that have reached an impasse, which is not the case in our case.
54. From a material point of view, it was argued, there is no point in dissolving the partnership since the property has already been sold and all that remains is to transfer the funds already in the partnership's account in Germany to Israel, and therefore the appointment of a liquidator will cause tremendous damage, especially to the applicants.
55. According to the respondents, the German partnership's property was purchased for about €6.9 million and sold for a fantastic sum of €10.8 million, and in the partnership account there are about €7.6 million, which can be transferred to Israel after tax payments, but Müller refuses to sign and approve the transfer of the funds to Israel, and as a result, the funds cannot be distributed to investors. The applicants, it was claimed, chose not to testify against Patrick Mueller despite their reliance on his many falsehoods.  The applicants also did not try to convince the court that since Muller lives in Germany, he should testify in a video conference.  Their refusal to testify until his testimony might have been relevant establishes a presumption that if he had testified, his testimony would have acted against them.
56. Therefore, the Respondents' version with regard to the events that took place in Germany was not contradicted and even strengthened by the Applicants' refusal to testify against Müller.
57. In this state of affairs, it is argued, it is not clear what benefit the dissolution of the partnership would be for an appointed official to be required to continue the claims against Mueller and to take proceedings against Mueller in order to advance the transfer of the funds. This will force us to re-examine the entire issue, to engage with other lawyers, Muller will be able to use the dissolution of the partnership, and this will inevitably lead to a significant delay in the advancement of the partnership's affairs and will prevent the transfer of the funds to Israel in a manner that will cause fatal harm both to the applicants themselves and to the other limited partnerships, as well as to the respondent.  In addition, the appointment of a liquidator will entail high and unnecessary costs, so that the cost and damage resulting from the appointment of a liquidator to the partnership outweighs the benefit, which has not been proven at all.  According to the respondents' position, in the absence of benefit to the dissolution, the filing of the application for dissolution of the partnership constitutes an exercise of bad faith of a legal right that is sufficient to reject the application.
58. Therefore, it was argued, even if it were to be assumed, for the purpose of the matter, that the Applicants do indeed have a right that has supposedly been proven to dissolve the partnership due to a "loss of trust" or any other reason, then given that there is no benefit in doing so (but only damage), the use of that "right" constitutes a bad faith use of a legal right.
59. According to the Respondents, the claim of no confidence made by the Applicants is artificial. The Applicants complain about the alleged unlawful taking of fees and/or expenses and/or success fees, and on the basis of this they claim a lack of trust, but that this is a classic legal dispute that must be decided while conducting an appropriate proceeding, and which in any case does not confer the right to dissolve the partnership.  Thus, for example, in the main application, the applicants claimed that they were supposedly promised a fixed return of 10% per annum, but it was proven that such a commitment was never given, but on the contrary, they were presented with all the risks involved in investing overseas, until this claim was abandoned by them.  Moreover, the only declarant on behalf of the Applicants testified that he was aware that the company would be entitled to commissions for both a success fee and a brokerage fee, but the dispute, according to him, lies in how much and when.  On the other hand, the Respondent claims that nothing was ever hidden from the Applicants and that the expenses, including the company's commissions, range from 10% to 15% of the value of the property, and that this was written in Rachel, your little daughter, in clause 5.2 of the partnership agreement.
60. As appears from the Applicants' summaries, most of their arguments relate to the fact that the Respondent, according to them, collected commissions and/or success fees allegedly unlawfully, while concealing them from the Applicants. However, nothing was hidden from the applicants, and the words were written in Rachel, your little daughter, in clause 5.2 of the partnership agreement, and every investor who harassed him in any way in the agreement, received detailed and full answers from the company's representatives, and after providing these clarifications, an investment was made.  In addition, it was argued that as appears from Yagil's testimony, which was not concealed, in any case these are completely legitimate sums of expenses in transactions on the scale of millions of euros, and therefore in any case there is no justification for ordering the dissolution of the partnership in a manner that will cause enormous damages to all the partners, including those who did not take part in the proceeding, and it is clear that insofar as they have claims of one kind or another in connection with the funds that were allegedly taken illegally, The way is open to them to file an appropriate monetary claim, and this does not constitute sufficient grounds for such exceptional and extreme relief of dissolution of a partnership, certainly not with such a good investment as the transaction that is the subject of this partnership.
61. According to the respondents, the use of the rhetoric of "theft of investment funds" is demagogic rhetoric intended to create a "colorful drama" as if huge sums of money were illegally withdrawn, in the hope that by virtue of it the court will get the impression that such a drastic remedy of dissolution of partnership and the appointment of a receiver is needed. Moreover, since this is a claim of fraud, the applicants have an increased burden of proof, which they did not meet.
62. With regard to the claim that the receipts issued by the respondent were written 'brokerage fees', it was emphasized that those receipts also included all the expenses incurred by the company in advance, from its own money, and as Shoval declared, the title was recorded in accordance with the accounting advice received by the respondent.
63. Finally, it was argued that "no-confidence" is not a magic word for which such an exceptional and extreme remedy of dissolution of partnership can be ordered and that this remedy will cause tremendous damages from all along, the person who was in contact with Müller is the respondent through its managers, they are the ones who are familiar with the matter from beginning to end and the only ones who can testify in the legal proceedings in Germany when the applicants and their counsel are in an inherent conflict of interest in light of their cooperation with Müller. In addition, it was argued that although the Applicants' ISA withdrew this petition, the fact that the Applicants dared to request the appointment of an attorney from their attorney's office as a receiver only shows that the application is not based on real reasons, but only an attempt to "create a file".
64. According to the Respondent, the relationship between her and Müller is not of the Applicants' concern and there can be no dispute that the Applicants were promised 50% of the rights that would be received from the sale of the property, and thus no change was made, and in any event, no damage was caused to the Applicants as a result. Moreover, the Applicants' only argument in this matter is that "it was not known to the investors in advance" and that this was done behind their backs, but as long as the Applicants received what was promised to them, i.e., 50% of the rights in the property, matters related to the company and Muller are not their concern and have nothing to do with them in any way.  The Applicants' reliance was to receive 50% of the profit rights in the property, and so it will be.  The Applicants did not even claim that they would not have engaged in the first place if they had known as aforesaid, and this speaks for itself and proves that the entire line of argument regarding those 25% of the rights for profit does not really interest them, and that it is clear that these are additional baseless claims in order to substantiate their claims of distrust in an artificial manner.
65. In addition, it was argued that although the fact that the company has the right to receive 25% of the profits of the property, if any, does not grant it excess voting rights, the fact that the company should also profit from the arrival of the funds in Israel constitutes conclusive proof that the company and the applicants are on the same side and have a clear common interest. In this matter as well, it was argued that at most the claim can reflect a financial claim, which does not lead to the dissolution of the partnership, certainly not at the current stage when the property has already been sold and all that remains is to transfer the funds to Israel and distribute them to the investors.
66. Finally, the Respondent argues that the Applicants failed to prove that it was not conducted in a transparent and open manner, and that it was precisely the testimony of the only declarant on their behalf that revealed that he received the full information even before the investment, whereas, on the other hand, the Applicants were unable to present even a single reference to the questions that were asked and not answered, or to the inquiries and demands for information that were not received. This strengthens the conclusion that the applicants are not really interested in receiving answers, assisting in the proceedings against Mueller, or receiving their money as quickly and without burdening unnecessary costs, and that their only desire is to dissolve the partnership out of extraneous motives.

The Applicants' Arguments in the Reply Summaries on Their Behalf

67. In the summaries of the reply on their behalf, the Applicants argued that in the Respondent's reply summaries, there was no answer to the variety of contradictory versions presented by the Respondent's representatives in their testimony in relation to the three pillars of the liquidation application. Instead, the respondent chose to try to "obscure" the facts, lest the court "not notice" that it had no answer to the applicants' sums or would be captivated by its new story, according to which the respondent insisted on distributing the sale money to investors, but this was not possible due to Mueller's objection.  However, this constitutes a "blatant distortion of reality" when Mr. Shoval Manovich testified in his cross-examination in the application for interim relief that the reason for the sale money was not transferred to the applicants was due to his own fear of the trustee's claim for the bonds, a concern that stemmed from the improper mixing made by the respondent in the assets of the various partnerships, and despite the fact that the limited partnership is not at all a party to the issuance of the bonds in Germany.
68. According to the Applicants, in the absence of a substantive response to the Applicants' claims, the Respondent chose to attack the Applicants and all of them on the grounds that they were "puppets" of Mueller who "feeds them false information", but from the Respondents' summaries it is not possible to clarify what that "false information" or "biased and misleading" is, and for good reason. The Respondent does not deny the content of what Mol gave to the Applicants regarding any of the three factual elements that make up the liquidation application.  It does not deny the brokerage fee it pocketed, it does not deny that it received 25% of the rights in the profits without consideration, and it does not deny that only €3.5 million out of the total of about €4.62 million raised was transferred to the German partnership as a loan.
69. All of this did not prevent the Respondent from arguing that the Applicants' counsel continues to act as Mueller's long arm. Serious personal accusations that have no basis in the evidence presented to the court.  The liquidation request was filed by 23 applicants, and was supported by 17 additional partners, so that in the business restrictions it was filed with the consent and consent of 40 limited partners.
70. The arguments regarding the proceedings that the Respondent is conducting vis-à-vis Mueller also constitute an attempt to deviate from the essence and are not relevant to the issues underlying the liquidation request. First, the respondent admitted that no proceeding was filed against Müller in connection with the limited partnership.  Second, even if we assume that all of the Respondent's claims against Muller are true and assume that Muller is a thief and a fraudster, this does not negate the Applicants' claims that the Respondent stole from the Partnership's assets repeatedly.  Third, if at all, credit should be given to the respondent's duty to conceal the most serious rulings of the Dutch Court of Appeals of December 6, 2023 against it and its officers, which are more severe than the rulings set in the German judgment of September 26, 2023 against Müller, according to which the respondent and its managers put the partnerships at risk of bankruptcy and acted at the expense of the investors.
71. The claim that "all that remains" is to continue the proceedings against Muller is also misleading, since there is no dispute that there is no proceeding against Muller in the matter of the partnership, and the Respondent's CEO even testified that he was not aware of any intention to take such a proceeding. On the other hand, it is clear that only a liquidator will be able to sue the investment funds stolen by the respondent, since this is a cause of action by the partnership itself, and in the absence of a liquidator, it will not be possible to recover the theft, since the respondent will certainly not act to sue itself.
72. According to the Applicants, the Respondent's claim that they refused to promote an agreed solution is a false claim that does not describe the facts as they are and ignores the fact that Mr. Shoval Manovich himself testified in the hearing of the application for interim relief that he refuses to transfer the proceeds of the sale to Israel because he does not want to take the risk.
73. In response to the Respondent's argument that no personal loss of confidence of all the Applicants was proven, it was argued that the claim should be dismissed out of hand as it is an extension of the front and that the claim should be dismissed on its merits, since sections 45(4) and 45(6) of the Ordinance do not prescribe an obligation to prove a subjective loss of confidence of each of the members of the partnership, and this is a requirement invented by the Respondent. In addition, it was argued, there is no dispute that all the partners received the liquidation request and the affidavit attached to it, so that they knew and knew it well, while 17 additional partners, in addition to the 23 partners who submitted the application, submitted affidavits in support of the proceeding.  In addition, it was argued that there is no basis for the respondent's claim that it is not possible to know what representations were made to these partners before the affidavits were submitted, especially since the representations were made by the respondent herself.
74. According to the Applicants, there is no basis for the Respondents' argument that one of the affidavits, Sections 45(4) and 45(6) of the Partnerships Ordinance do not establish an obligation to prove a subjective loss of confidence on the part of each and every member of the Partnership, and since there is no dispute that all the partners received the Applicant's request for liquidation and the Applicant's affidavit, so that they knew and knew it well.  In any event, it was argued, the argument should be rejected because it is an expansion of a prohibited front.
75. According to the Applicants, there is no basis for the Respondent's claim that sections 45(4) and 45(6) of the Partnerships Ordinance apply only in the case of a "dead end" and never apply to a limited partnership in which only the general partner makes decisions. In any event, it was argued, the request for liquidation also relies on section 45(6) of the Law, which is a basket clause that leaves the court broad discretion and by virtue of which the court is empowered to order the dissolution whenever circumstances arise that, in the opinion of the court, make the dissolution of the partnership an act of justice and honesty.  This is an honest remedy, and the respondent cannot bind the court's hands from granting a liquidation relief when a general partner stole and concealed from the limited partners, just as the company cannot be conditioned to act in good faith.  According to the applicants, this argument should be rejected even as it is an extension of the façade.
76. According to the Applicants, there is no basis for the Respondent's claim that in accordance with the case law there are cumulative conditions for liquidation, and in any event, these conditions are fulfilled in our case. There is no basis for the claim that the agreement foresaw a situation of problems and left the discretion in the hands of the general partner alone, since this claim is relevant to ongoing management in the ordinary course of business, but not in the case of theft and breach of trust.
77. As to the argument that this is an "honest" dispute regarding the interpretation of the agreement regarding the amount of the commission, it was argued that this argument could have stood if the respondent had disclosed to the partners about the funds it had taken, but in all three cases the respondent concealed the facts from the applicants, both before and after the investment.
78. In addition, the Applicants claim that the Respondent's attempt to shut their mouths, including by means of the claim that the partners stipulated, as it were, on the court's authority to dissolve the partnership is baseless. In this regard, the Applicants referred to the decision of the Supreme Court (the Honorable Justice D.  Mintz) in the application for leave to appeal filed by the Respondent against the Court's decision in the prelude argument she raised there, it was noted that "I find the Applicants' argument that it is possible to condition the provisions of section 45 of the Ordinance and to deny the court's authority to order the dissolution of the partnership, or to deny the right of a partner to apply to the court with a request that it exercise its authority.  This is especially true in cases where claims are made against a partner in a partnership such as those that were made against the general partner in this case." Even the (new) argument that in accordance with section 63(d)(2) of the Ordinance a limited partner cannot dissolve the partnership by giving notice of this intention cannot benefit the respondent, since the applicants did not "notify" an intention to liquidate, but rather approached the court with an appropriate request in accordance with section 45 of the Ordinance.

Discussion and Decision

79. Section 45 of the Partnerships Ordinance deals with "liquidation by the court" (as distinct from "dissolution of the partnership by itself or by a partner" which section 41 of the Ordinance deals with) and instructs that:

"The court may, at the request of a partner, order the dissolution of the partnership in one of the following: