Against this background and from a practical point of view, Mr. Nehemia remained with 24% of the shares of the French company for a long period of time, until it was agreed to return them in exchange for the return of the consideration he had invested. In these circumstances, there was no real impact on the picture of the failure to take the mechanism of termination of the agreement set forth in clause 7.3 as aforesaid.
- Thus, the component of Mr. Knepfler's share in the revenue stream can potentially substantiate the breach of the agreement with him, when the transaction with the Dayan Group was advanced. And even say that when Mr. Nehemia pushed ADN to enter into a contract with the Dayan Group, he caused a breach of the agreement with Mr. Kneffler, he still had sufficient justification for his conduct.
As Goshen and Eckstein noted, "One of the foundations required for establishing a cause of action for breach of contract is that the breach of contract was done 'without sufficient justification'; and in the appropriate circumstances, the fact that the breach of contract was committed by a manager - within the framework of his authority as a manager, for the benefit of the company and without a foreign motive - may serve as a good justification for the defendant in this matter" (Goshen and Eckstein, at p. 203).
These words are appropriate for our purposes. It was clear to Mr. Nehemia that without the sale of the company's assets, including 76% of the shares of the French company, the company would reach the end of its path, since it had to pay its debts as early as November 2016. Under these circumstances, Mr. Nehemia promoted the transaction with the Dayan Group within the framework of his authority as manager. He did so for the good of society. This deal was preferable to the one offered by Mr. Knefler. In his advancement, there was no foreign motive on his part. This transaction, as such, did not negate Mr. Knafler's right to the remaining 24% of the shares. As for the personal interest that I assumed that Mr. Nehemia had in the transaction, it also exists in promoting the transaction with Mr. Kneppler.
- In these circumstances, Mr. Knepfler did not establish the possibility of suing Mr. Nehemia personally for the tort of causing the breach of contract. The owner of the matter was supposed to be the company, and it was even so, and he reached a settlement with it that received the force of a judgment. Nehemiah will not be repayed.
Additional Arguments
- The parties raised many other claims. As stated, I did not find that they deviated from the conclusion I reached. For example:
- Knafler argues that the defendants did not call essential witnesses and that this should work against them. However, the evidentiary picture that was established leads to the conclusion that there were no special circumstances that could impose personal liability on the defendants. The manner in which they acted and the considerations they considered were presented and analyzed. The need was established in light of which the company's affairs were advanced, when the decisions were supposed to be made quickly in light of the emergency situation in which it was located.
Against this background, I do not believe that the failure to summon the editor of the forecast document (Mr. Rappaport), or the lawyer who advised to cancel the agreement with Mr. Knepfler (Dr. Wekselman) would have changed it.
- When Mr. Knepfler's arguments were rejected on their merits, I do not need to address the defendants' arguments for the lack of sufficient detail of his claims in the statement of claim.
- The parties devoted a significant argument to the significance of the fact that the agreement entered into between Mr. Knepfler and the Company included an As Is clause on the one hand, and representations made on behalf of the Company on the other. I did not find any reference to this when I examined the claims of deception on their merits.
- I was not required to defend my reliance on legal advice.
- I did not address the problems that were discovered in the implementation of the agreement with the Dayan Group. This matter does not establish the responsibility of the officers, nor does it establish a deviation from professional standards in connection with the engagement with the Group. The clear picture that emerges from all the relevant data is that this transaction was the best that the company had in mind at the relevant time, and it had no other option that could have established an alternative engagement. Knepfler's proposal was not like that.
- Knafler claimed that after he filed a request for an injunction at the beginning of the litigation, the defendants raised the possibility of conspiring in December 2016, according to which another agreement would be signed between the French company and the Dayan Group for the sale of 76% of the company's shares. It was argued that by doing so an attempt was made to circumvent the decision of this Court (my colleague, the Honorable Justice Kirsch). Mr. Knepfler further explained that this agreement was not launched following the meeting of the shareholders of the French company (see paragraphs 166 ff. for the counterclaimant's summaries).
I am not required to rule on this matter, since these are issues that are later than the relevant events, and they do not color the conduct of the defendants in relation to the issues in dispute.
- And when the liability was not established, I did not find it necessary to discuss the defendants' claims regarding the damages claimed.
The Result
- Knepfler was unable to establish the circumstances that could impose personal liability on the defendants. Therefore, they did not establish legal standing to sue them or direct legal rivalry against them.
- The lawsuit is dismissed.
- As to the matter of expenses, defendants 2-4 petitioned for the possibility of filing a supplementary argument regarding the expenses, to which I agree. The issue of the expenses to be imposed in respect of this proceeding will therefore be the subject of a separate decision.
- The right to appeal lawfully.
- The secretariat is asked to close the file.
Granted today, February 08, 2026, in the absence of the parties.