He added, "When it came to approval [at Tamir Fishman], they demanded additional tests. Then the company's finance people, including Tal Levy, came in... And see that the representations or what was said, okay? I will be careful with my words, it does not correspond to what is happening on the ground" (ibid., Q.10 onwards).
Third, according to Mr. Knepfler himself, at this stage, a discrepancy was discovered between the representations made to him by Mr. Nehemia and the company's economic reality, which emerges from the reports. It cannot be accepted that the picture has returned to rosy, according to him, when the economic examination that was carried out regarding the properties included problems with the occupancy of tenants in them. Under these circumstances, it was expected that there would be difficulty with the cash flow that the company would receive from their rent.
- Knapfler tried to minimize the intensity of the negative representations that arose from due diligence. He noted that the reason why the fund did not move forward with the transaction stemmed from the fact that its realization involved an interested party's transaction. Against this background, obtaining the required approvals would have taken time, and the deal had to be advanced quickly, so he decided to engage in it personally.
He explained that since at this stage he had already transferred a payment on account of the consideration personally, the Fund's legal advisor, Adv. Ronen Zitbar, was of the opinion that the transfer of the transaction from Mr. Knepfler to the Tamir-Fishman Fund would amount to a transaction of an interested party with the latter (paragraph 45 of his affidavit). This was also testified by Adv. Pereg, who noted that Adv. Zitbar expressed a position that the transfer of the transaction would amount to a transaction in the event of a matter (paragraph 24 of his affidavit).
However, the evidentiary situation is more complex.
At the meeting of the Board of Directors of the Tamir Fishman Foundation (dated May 31, 2016) (N/2), Adv. Zitbar explicitly stated that "if the Board of Directors of the Company chooses, after the amendment of the Articles of Association, to approve the transaction and return the advance money, this will not constitute a transaction with an interested party" (p. 3 of the document). Indeed, Adv. Saar amended his testimony in his cross-examination, but added that according to the legal counsel, an amendment to the bylaws was also required, a fact that would have caused a delay in the timetables (p. 223, s.1). At the same time, later in his interrogation, he insisted that he remembered that Adv. Zitbar had raised the difficulty of an interested party's transaction (p. 224, s. 17).
- Hence, I determine as a finding that one of the main reasons that the Tamir Fishman Foundation chose not to proceed with the transaction was the risks posed by its public reports and due diligence that was conducted. Hence the conclusion is drawn that Mr. Knepfler decided to move forward with the transaction while he was aware that the company's situation was financially problematic, and even extremely problematic.
No misrepresentation was made regarding the rental status of the properties in France, which emerged from the company's reports and public reports
- Against the background of what has been stated in the previous section, it is necessary to reject Mr. Knepfler's claims regarding the existence of an alleged deception in relation to the rental status of the properties in France.
Here, too, Mr. Knepfler relied on clause 5.3 of the agreement, according to which the company made a representation that its most recent financial statements and public reports faithfully reflect its situation. According to him, he was presented with a rosy picture regarding the status of the assets under ADN's control. However, this argument cannot be accepted, since it is a review of the company's reports and reports that led the Tamir Fishman Foundation to the conclusion that the company's financial situation is problematic.