The crystallization of the transaction with the Dayan Group, which from the directors' point of view was better than the one proposed by Mr. Knepler (at least in its cash component), and taking into account the past experience of dealing with him
- At the time, Mr. Nehemia was conducting negotiations with the successful Dayan Brothers Group, which led to the transaction that will be presented immediately below. But at this stage, and in order to assess the performance of the board of directors, it is necessary to take a closer look and examine the circumstances against which it should have made the fateful decisions that could have decided the fate of ADN.
There is no dispute that the company's situation was serious in light of its debts and their repayment dates in November 2016. On the agenda was the repayment of a loan of €2 million to Phoenix; €1 million to Schechter; and €2.6 million to Ravad. Against this background, it was essential to find an investor who could purchase its rights in the various assets controlled by it (in a chain).
- The Company's management provided the Board of Directors with details regarding potential transactions on the agenda (email of October 26, 2016; Appendix 47 to the Directors' Affidavit), including the transaction with the Dayan Group:
- One offer was from a Swiss company, but it was clarified that the transaction for the purchase of the assets would not be completed before the end of 2016. This situation put the company in a dilemma, as the repayment dates of the various loans were due to knock on the doors in November.
- An offer by the Dayan Group for the purchase of properties in France and property in Germany. There was talk of a "net deal" in exchange for 8.5 million euros. Regarding this transaction, it was noted that "if and to the extent that this transaction is approved and completed, the consideration may leave the company with a cash balance of approximately €3 million after the repayment of the obligations to Phoenix, Ravad and Schechter. On the face of it, it seems that this is a quick deal that will allow the company to meet its obligations."
In the course of the discussion on the realization of this channel, and as part of the details of the obligations that the company will have to meet, it was noted that 3.5 million euros will have to be returned to Mr. Kneffler, which is the investment money he has invested so far.