Indeed, it cannot be said that this argument is insignificant, and that there is no significance to the violation of the rules of corporate governance to the extent that they have been violated. But the question is whether he weighs his weight in the relationship between the counter-plaintiff and the directors? This matter could potentially weigh heavily on the relationship between Mr. Nehemia and the company. To the extent that he breached his duty of trust to it, and I do not determine that he did so, he may have to return the profits he generated as a result to the company (see the discussion in the Deri case, at paragraph 102). However, all of the above applies to the relationship between Mr. Nehemia and the company. It does not touch on the relationship between Mr. Nehemia or the directors and a third party such as Mr. Knefler. This matter does not in itself affect the relationship between them, and does not establish a relationship of neighborliness in tort or liability for the tort of causing a breach of contract.
- This set of considerations leads to the fact that even if we proceed from the strict assumption that the transaction was discussed by an interested party, the circumstances of the present case do not lead to the imposition of personal liability on the directors. As stated, the question of the validity of the transaction with the Dayan Group is not subject to examination at all, and from a material point of view, the failure to take the relevant procedure did not lead to harm to the company, its shareholders, nor to Mr. Knefler's direct personal interest. This matter, therefore, does not change the conclusion that is being formed.
Interim result
- The claim against defendants 2-4 is dismissed. While there is no basis for imposing liability on these defendants, there is no need to examine the disputes regarding the damages that are the basis of the claim against them.
The Claims Regarding Mr. Nehemiah's Liability
- The time has come to turn our gaze toward Mr. Nehemiah.
- Nehemiah's case is different from that of the other directors. As the controlling shareholder and manager of the company, he was the "living spirit" in the negotiations with Mr. Knefler. He personally presented him with the various representations in relation to the deal. He personally accompanied the developments and the interim summaries. Therefore, the potential to establish the neighborly relations required for the establishment of liability in torts or the same direct rivalry increases, to the extent that it is determined that he committed deception or acted in subjective bad faith, which can also establish conduct that is immersed in extraneous considerations that can in turn establish liability for the tort of causing a breach of contract.
- When examining the matter of the directors, Mr. Knepfler's claims that they had misled him in light of the representations made in the framework of the agreement with him were rejected. These conclusions are also relevant to Mr. Nehemiah.
Indeed, Mr. Knafler claims that the picture presented to him by Mr. Nehemiah, at the very beginning, was too rosy and therefore misleading. However, he also agrees that he became aware of the company's problematic situation already at the stage of the due diligence conducted by the Tamir-Fishman Foundation (see above at paragraphs 136 onwards). According to him, this is the reason why changes were made in his favor in the draft agreement that is being formulated with the company. Hence, Mr. Nehemiah's rosy presentation of things at the beginning of the journey cannot establish his personal responsibility.