The basic settlement outline also included the cancellation of the agreement with Mr. Kneppler, and the return of the shares of Guy Development that he had received. As a result, it was agreed that Mr. Knafler would receive the €3.5 million he had invested in exchange for the return of the shares. It was also determined that he would receive compensation of €100,000 (according to the agreement; in the second amended counterclaim, it was stated that this compensation was set at €68,462 (see paragraph 114.6)).
The parties to the settlement agreement agreed to waive their mutual claims, but it was agreed that Mr. Knepfler would have the right to continue the legal proceedings with Mr. Nehemia and the directors.
The Reamended Counterclaim and its Clarification
- Against the background of the settlement agreement, the amended counterclaim was filed again, and while ADN's claim was rejected, it remained the only one to be discussed. This lawsuit has become financial, with Mr. Knepfler being the counter-plaintiff, and not Guy Initiation, and it is directed, as stated, against Mr. Nehemia and the three directors.
- In the lawsuit in the updated version, it was claimed that Mr. Nehemia and the other directors were liable for damages for causing breach of contract, and for negligence.
- It was further explained that in light of the Settlement Agreement, Mr. Knepfler waived the claim for a declaration regarding the validity of the original agreement with ADN and the issuance of an order to enforce it, while sufficing with compensation for the damages caused to him:
- financial relief for loss of income; taking into account the cash flow that was to be received, there was talk of a sum that could be conservatively estimated to be €4 million. For the purposes of the fee, this compensation component was set at ILS 10,000,000.
- Compensation for Alternative Profit; Here we are dealing with an alternative profit that Mr. Knepler would have derived from other investments that he would have invested in, had he not been attracted to invest in ADN in light of misleading representations. Knafler made, as may be recalled, an investment in the Maslawi company during the relevant period (see above in paragraph 1), and if he had increased his investment in it, he would have received a handsome return. The ILS 10 million compensation component also fits this head, according to a conservative estimate. Alternatively, the court was asked to determine the scope of the appropriate compensation for it.
- In exchange, it was claimed that Mr. Knafler was entitled to compensation for the expenses he incurred, which included, inter alia, financing expenses for loans he took, and payments to lawyers.
- In the lawsuit, in its updated version, three evidentiary hearings were held. In addition to the plaintiff, Mr. Lorenzi and Adv. Pereg also testified. The counter-defendants also testified: Mr. Nehemia, Mr. Dubrovsky, Ms. Halevi-Barzilai and Mr. Peretz.
The parties submitted their summaries and the time came for a decision.