The District Court further ruled that an engineering transaction was lawfully approved by Hefzibah Investments' institutions, and more than necessary, according to him, it further ruled that this was not an "exceptional transaction" as aforesaid In the section 272 30Companies Law. In this context, it was clarified that Heftziba Engineering did not receive consideration for the provision of guarantees to Heftziba Housing and Heftziba Investments, but "The terms of the guarantee were normal when she herself received the assets she had worked for the benefit of the other companies from Mordechai Yona" (paragraph 31 of the decision). It was further clarified that "The transfer of funds and collateral from one company to another in the group was a daily occurrence and an accepted and regular work routine among all the members of the group. Therefore, it cannot be said that in this case the provision of the lien provisions was an unusual transaction" (paragraph 32).
The Dispute Fence and the Parties' Arguments
- In light of the Special Manager's position regarding the nullification of the back-to-back transactions and the engineering deal, a dispute between the parties has been abandoned on a number of issues - and inter alia, on the question of whether the back-to-back transactions and the engineering deal were tainted by a "personal interest"; If the officers were involved in these transactions in a conflict of interest that amounts to a breach of fiduciary duty; if these are "unusual transactions"; if any of the transactions were "for the benefit of the company"; If the transactions have been approved by Heftziba Investments and Heftziba Engineering (as applicable) as required In the section 272, and if not, - if the banks knew about the "personal interest" of the officers and the lack of the necessary approvals; And to the extent that the special manager has the right to cancel the transactions, what is the scope of the retirement obligation resulting from the cancellation? In addition, the parties disagree as to the contractual validity of the transactions and whether they should be considered an "invalid contract"; The same applies to the question of whether any of the transactions constitute a "disguised pledge" that is considered null and void.
I will preface by saying that not all of these disputes need to be decided, and therefore the reference to arguments that are not necessary for the outcome will be brief. As to the order in which the arguments are presented - Since the receiver supports the position of the Special Director in the appeals, their arguments will be presented in consolidation; And so on.The arguments of Mizrahi Bank and Discount Bank are also very similar to each other (unless otherwise noted).