| Tel Aviv-Jaffa District Court | |
| Civil Case 41953-01-17 IDN Global Equity Ltd. et al. v. Knepler et al.
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| Before | The Honorable Judge Gershon Gontovnik
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The Counter-Plaintiff |
Eliyahu Knefler By Attorneys Yedidya Melchior, Rotem Neufeld and Hannah Sardi de Letto Lapidot, Melchior, Abramovich & Co. |
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Against
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| The Counter-Defendants | 2. Avi Nehemiah
By Adv. Oded Shteif 3. Daniel Dubrovsky 4. Ravit Halevi Barzilai 5. Shlomo Peretz By Adv. David Leshem and Shai Saidoff Nir Cohen, Leshem, Ben-Artzi & Co.
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Judgment
An Israeli company, which owns properties in France, ran into liquidity difficulties. It had to repay a lot of loans, with its controlling shareholder, who also served as its manager and director, personally guaranteeing the repayment of some of them. Profit and success were found in the investor, who entered into a deal with the company, which was supposed to ease its situation. However, its implementation encountered difficulties. The investor claimed that he had been misrepresented before the engagement, and he asked to change some of its terms. At the end of the day, the company entered into a transaction with a third party, and the company's board of directors approved it, and the dispute quickly reached the court.
Years later, the company and the investor reached a settlement in which he received his investment money back and returned shares he had purchased. Indeed, the person who claims that a company caused him damages and that it violated agreements, acquires standing to sue it, establishes a legal rivalry with it, and the matter is necessary.
However, the investor is not satisfied with this. He argues that personal liability in damages should be imposed on the directors and the controlling shareholder, and they should be obligated to compensate him. Is that true? What are the circumstances that could grant him legal status to sue them personally, and direct legal rivalry with them?
Background
- Eliyahu Knepfler, the Counter-Plaintiff (hereinafter: Mr. Knepfler or the Counter-Plaintiff) is an investor, most of whose investments are made in private companies and a minority in public companies. Thus, for example, at the beginning of 2016, through corporations under his control, he invested approximately ILS 43.7 million in order to acquire joint control of Maslawi, a construction company in a tax appeal (hereinafter: the Maslawi Company). He also served as the controlling shareholder of the public company Tamir Fishman Real Estate Fund in a tax appeal (hereinafter: the Tamir-Fishman Fund or the Fund). At the time, the fund had liquid funds at its disposal for investment, and Mr. Knepfler was looking for a suitable business opportunity.
- This is where the heroine of the lawsuit comes into the picture, namely Company A. An Global Equity in a Tax Appeal (hereinafter: ADN or the Company), which at the relevant times was an Israeli public company. At first, Mr. Knepfler asked to make an investment in the company through the Tamir-Fishman Fund, and later found himself investing in it personally. This investment led to the disagreements that underlie the lawsuit at hand.
- The Ottoman Settlement [Old Version] 1916The background to the dispute is complex and branched, but it is worth noting it so that the parties' arguments can be fully understood. I will therefore turn to present the valley of the corporate dispute.
12-34-56-78 Chekhov v. State of Israel, P.D. 51 (2)The Arena of Dispute: ADN, Its Indirect Control of Assets in France, and Its Cash Flow Distress
- In order to understand the dispute and the deals on the agenda, it is necessary to see the picture of the relationships between the various companies.
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