On the other hand, the defendants claim that Mr. Knafler was aware of the company's financial situation, which emerged from the reports to which he was exposed prior to the conclusion of the agreement. He was the one who violated the representations he presented. Although he claimed that he had the capital at his disposal to complete the transaction, this was not the case. Therefore, he was forced to turn to others for financial assistance. In addition, he was aware that the company urgently needed payment in light of its debts, and therefore the fast timetables in the agreement for the transfer of the consideration components were also determined. Under these circumstances, Mr. Knepfler did not complete the payments as required, and if we precede it, he tried to force the company to sell him the remaining shares of the French company in a lentil stew. But he did not imagine that she would be able to find another investor, which she did.
- Let us return to the description of the sequence of events.
According to the agreement, Mr. Knepler was required to pay €1.45 million by June 30, 2016 (taking into account the advance he had already paid). Of this sum, 750,000 euros were paid, and on July 1, 2016, Mr. Knepfler paid an additional 300,000 euros, and remained in debt of about 390,000 euros. Mr. Knafler claims that the reason for the underpayment lies in the discovery of the false representations that were presented to him. The defendants, on the other hand, claim that he ran into financing difficulties, and could not pay what he undertook on his own.
Either way, according to the agreement, Mr. Knepfler was supposed to pay an additional €2 million by the end of August.
In the meantime, the company's board of directors raised concerns that Mr. Knepfler would not meet his obligations under the agreement. It was no small matter. The company was in urgent need of funds because it had to pay Ravad ILS 1.65 million on account of debt until August 31, 2016.
- According to Mr. Knepfler, it was agreed, after discussion with Mr. Nehemia, that he would pay Ravad €1.65 million directly and the balance of the consideration in the amount of €504,000 would be delayed until the parties were reckoned. In addition, the allocation of the remaining 8 percent of the shares of the French company to Guy Development was delayed. It was also agreed that the reckoning would be conducted within 30 days.
On the other hand, the defendants claim that his demand to delay the balance of the payment in the amount of 504,000 euros landed on them by surprise only on August 28, 2016, and they were forced to agree to it that otherwise the debt to Ravad would have been a candidate for immediate repayment. This reflects Mr. Knapfler's lack of good faith.
- In any event, during the 30 days allotted for this, no accounting was made in order to complete the original transaction (with each party blaming the other). Instead, a new proposal was put on the agenda for the purchase of the remaining shares of the French company and the assets in France.
A new transaction proposal by Mr. Kneffler, and ADN's engagement with the Dayan Group
- Knepler recruited Mr. Lorenzi - first as someone who would lend him money in order to pay the consideration for completing the transaction and then as a potential investor. At this stage, Mr. Knepfler asked to change the outline of the transaction, taking into account the current picture of things, and for this purpose negotiations were conducted with Mr. Nehemiah.
On September 22, 2016, Ness sent a draft agreement according to which Mr. Knepfler (with Mr. Lorenzi) would purchase the remaining rights in the French company in exchange for the payment of €2.2 million.