To this, it should be added that I determined that the company's complex situation arose from its financial statements and official reports. Mr. Knepfler was aware of this, and should have been aware of it, and chose to move forward with the transaction and enter into a direct agreement with ADN. The argument that the company's reports were too rosy was rejected in these circumstances, and this postponement is also relevant to Mr. Nehemiah.
I will therefore examine claims of additional misleading claims that Mr. Knepler alleges, and that Mr. Nehemiah played a dominant part in formulating. One relates to the forecast document; The second concerns non-disclosure, i.e., the non-mention of the dispute with the management companies of companies regarding debts to them that have been increasing.
Forecast Document
- In his affidavit, Mr. Knafler noted that he attached great importance to the matter of the NOI (Net Operating Income) figure relevant to the assets activity in France. Against this background, he was presented with a forecast regarding the expected income and expenses from the assets held by the property companies in France for the next five years. He was also presented with valuations of the three properties in France (Appendices 13-16 to Knepler's affidavit). According to him, these documents reflected an expectation that the NOI in relation to the two properties in Lille would be 1.199 million euros, while the property in Nantes would be 501,856 euros and in business restrictions about 1.7 million euros.
Mr. Knepler further claims that it was known in the company that there was no connection between these representations and reality. Thus, in the minutes of the meeting of the board of directors of ADN on May 17, 2016, Mr. Nehemia answered the question of the chairman of the board that the cash flow would be €400,000 gross per year for the three assets (Appendix 17 to the plaintiff's affidavit); and at the board meeting of June 20, 2016, a figure of €500,000 was given, according to a 100% holding of the assets (Appendix 18 to the plaintiff's affidavit).