On the other hand, Mr. Knefler summoned additional witnesses on his behalf, including Adv. Pereg, who took part in the negotiations with Mr. Nehemia and the company, and Mr. Lorenzi, who provided substantial funding to promote the transaction, and took part in the litigation surrounding the late offer that was offered to purchase the remaining shares of the French company.
- Nehemia knew very well that Mr. Knafler expected to receive a return of 20% per annum on the amount invested by him. And in order to persuade him to move forward with the deal, he presented him with false representations. In the meantime, Mr. Knepfler had already personally paid for the consideration, was caught up in the deal, and was forced to move forward with it because he feared that if he withdrew from it, he would lose his investment.
In any event, and contrary to the defendants' claims, the agreement he signed did not reflect an ordinary As Is transaction , because it was subject to the declarations of the seller, namely ADN. The directors who discussed the agreement in the board of directors did not bother to check the correctness of the representations made by the company. In addition, the As Is Agreement does not exempt the Company from the obligation to disclose material information insofar as it is known to it.
And now it turned out that the property companies in France owed a considerable debt to their management company, which in 2016 reached a total of 700,000 euros. This debt began to accumulate in 2015, and no one bothered to update Mr. Knepfler about it. It also turned out that the company's financial statements did not reflect its true situation, and that there had been a change in its situation for the worse. The performance of the properties in France was significantly lower than the published data. Against this background, the company's board of directors had to ensure that the information published was indeed appropriate. Thus, even before the agreement with the company was signed, the directors knew that the company of one of the properties in Lille would not meet the rental targets of that property, and again Mr. Knefler was not updated. Hence, the directors are also accomplices in the deception. The defendants were aware of a test balance that shed a problematic light on the state of the assets, and they did not bother to update it on this matter as well.