In his affidavit, Mr. Nehemia calculated the relevant data that arise from the documents (see the analysis that preceded paragraph 53), and in any event, when we neutralize the assumptions in the forecast document, and take into account the expenses incurred by the companies, such as financing expenses, we arrive at 442,881 euros. This sum is equivalent to the sums presented to the board of directors, and also close to the amount that Mr. Knepfler himself stated in his first request for the interim injunction.
- I did not find it necessary to attribute to the defendants the failure to bring Mr. Rappaport, the author of the forecast, to testify. When Mr. Knepfler's arguments are contradicted by the aforesaid, the ground is dropped under his arguments, and there is no longer a need to summon another witness for this purpose.
- I therefore determine that Mr. Knepfler's arguments in relation to the forecast document do not establish deception on the part of Mr. Nehemiah.
Mr. Nehemia did not meet the duty of good faith (non-disclosure) with respect to the dispute with the management company; And this matter may amount to deception
- The parties agree that at the time of the agreement, there was a debt of the company to the property management company in France. This debt amounted to €30,000 in 2015, and the balance of €700,000 was created in the first three quarters of 2016 (see what was stated at the meeting of the Company's Board of Directors of August 28, 2016 (Appendix 20 to Knepfler's affidavit)).
Mr. Nehemia claims that this means that at the time of the conclusion of the agreement between the company and Mr. Knepfler, the debt was approximately ILS 415,000. He explained that the dispute arose in light of disagreements regarding the management fees in view of the scope of occupancy of the leased properties.
Mr. Nehemia testified on this issue and noted that the company knew how to deal with the management company "[We knew] ahead, even two and three years ahead to deploy, because they were aware of negative occupancy in the property... Because of this, a debt was also created there that we planned to repay in the future" (p. 323, s. 25 ff.). He further testified that "in the books" it was mandatory to register this component at the maximum level of exposure, but in practice it was a matter of limited risk, which would not have harmed the cash flow (p. 324). It also emerges from what was said at the same meeting that Mr. Nehemia told the company's board of directors "that I emphasized [to Mr. Knapfler] several times and from the beginning that the past debts are ours and that he will not take part in them."
- The directors were not in direct contact with Mr. Knefler, but Mr. Nehemia dealt with him on an ongoing basis. Should he have updated him on the aforementioned development?
Mr. Nehemiah's answer is in the negative. He explains that in the agreement entered into between the company and Mr. Knepfler, clause 5.1 makes a distinction between Guy Initiation, in respect of which it is represented that it has no debts to third parties, and ADN and the companies under its control. With regard to the latter, it is claimed that they are meeting their obligations. Hence, in terms of the various representations, everyone, including Mr. Nehemiah, fulfilled the duties imposed on them.