(a) in a manner that may defraud a person or deprive a creditor of the company;
(b) in a manner that harms the purpose of the company and while taking an unreasonable risk as to its ability to repay its debts, provided that the shareholder was aware of such use, and taking into account his holdings and the fulfillment of his obligations to the company under sections 192 and 193 and taking into account the company's ability to repay its debts.
(2) [...]
(b) A court may attribute an attribute, right or obligation of a shareholder to a company or a right of the company to a shareholder thereof, if it finds that in the circumstances of the case, it is just and correct to do so, taking into account the intention of the law or the agreement that applies to the matter before it.
(c) [...]"
- Other Municipality Applications 9147-16 Avner Cohen, in Trust for the Purchasers of the Purchase Group in Neve YaakovNi v. Adv. Mordechai Kreuzer, [Nevo] held:
"As can be seen, there is a gap between the grounds by virtue of which it is possible to lift the 'regular' veil that enables the attribution of a company's debt to a shareholder (section 6(a)), and a 'reversed' lifting of the veil that allows the attribution of a company's right to a shareholder (or the right/obligation of a shareholder to the company - section 6(b)). Thus, lifting the veil under section 6(a) is possible in specific exceptional cases listed in a collective dispute (a)(1)(a)-(b), namely when the use of the separate legal personality is made for the purposes of fraud/deprivation of a creditor; or when the use is made in a manner that harms the purpose of the company while taking an unreasonable risk. On the other hand, the language of section 6(b) is much broader, and it allows the court to lift the "opposite" veil whenever the court "finds that in the circumstances of the case it is just and proper to do so.""
And yes,
"While Amendment No. 3 to the Companies Law led to a reduction in the grounds that allow for a 'classic' lifting of the veil, the arrangement relating to 'lifting the reverse veil' remained broad for a while, in a manner that leaves the court with discretion and flexibility to exercise it where it 'finds that in the circumstances of the case, it is just and proper to do so...'" Admittedly, this does not mean that the use of this tool will be done casually, and it has already been stated in case law more than once that the court must exercise this power sparingly (see, for example: the words of Justice Danziger Other Municipal Applications 8713/11 Sayeg v. A. Luzon Properties and Investments Ltd., [published in Nevo], para. 36 (August 20, 2017) (hereinafter: the Sayig case); the words of Justice Hendel in Civil Appeal 996/17 Texas Investments in Tax Appeal v. Sapperdell Entrepreneurship Ltd., para. 6 [Nevo] (August 31, 2017) (hereinafter: the Texas case)). At the same time, the starting point is that this is a "valve concept, a 'standard.' [e] functions as an open and flexible tissue... in order to achieve justice in the circumstances of the case", and the court must pour content into it (the words of the Vice-President (as then described) Naor inCivil Appeals Authority 2903/13 Intercoloni Investments in a Tax Appeal v. Shkedi, para. 37 [Nevo] (August 27, 2014); for the opinion that the concept of this valve is the equivalent of the general good faith principle, see the sole opinion of Justice (as he was then called) Rubinstein Other Municipal Applications 10582/02 Ben Abu v. Hamdia Doors Ltd., [published in Nevo], verse 13, 18 (October 16, 2005)). The language of the law is therefore clear, in the sense that the conditions for lifting the "inverted" veil are not as stringent as those required for a "classic" lifting of the veil, and the first can be done even in situations that are not as clear in their severity (the words of Justice Sohlberg in Tel Aviv. (Jerusalem District) 9628-07 Levy v. Sasson Ana Levy Ltd., [published in Nevo] para. 6 (May 13, 2010) (hereinafter: the Levy case)).