Indeed, the defendants are correct in their claim that a review of these reports shows that the properties in France are not at full occupancy, and that their occupancy situation reflects significant economic difficulties.
- It is sufficient to refer in this matter to Appendix 27 to the Directors' Appendices, where there is an immediate report issued by ADN on March 31, 2016. This report included reference to the first property in Lille and also to the second property there.
As for the first property, it was noted that the tenant there, when relevant, has the option to return leased areas of up to 550 square meters. With regard to the second property, it was noted that the property company had entered into an agreement with a financing body in December 2015, and the entry into force of the agreement was conditional on the rental of 1,500 vacant square meters in it by March 30, 2016. However, as of the date of the report, only 700 square meters had been rented. It was also reported that the date of the suspension was extended to June 30, 2016. It was also reported that the extension of the loan period was conditional on the repayment of 650,000 euros. This was explicitly stated in the company's financial statement for 2015 (Appendix 17 to the directors' affidavits), in which the conditions for the extension were detailed from the perspective of the lending entity (p. 604 of the numerator).
Hence, at this stage Mr. Kneffler was known, or should have been known, that the properties are rented at partial occupancy, and that there is an option for one of the tenants to return some of the areas he is renting and expand the unleased area.
- In this matter as well, I found to reject the counter-plaintiff's claim that he relied on misleading information regarding the occupancy of the assets and the rosy forecast presented to him, that there was a gap between it and reality.
In any case, such a forecast was not presented to him by the directors. In addition, and in light of the public information presented above, there was a risk that the company would not improve the situation in the short periods of time reported, and that as a result it would have to repay a significant amount of the relevant loan. In addition, Mr. Knepfler did not present any evidentiary basis for the fact that during the relevant period it was clear to the defendants that the relevant tenant would exercise his option to reduce the rental area, and therefore no misrepresentation was established on their part even in relation to this matter. The very existence of the option was considered public information even before Mr. Knefler entered into the agreement.