I will also note that the parties disagree whether Section 270(1)(II) applies in our case, and the District Court refrained from ruling on the matter - When he reached the conclusion that in any case there was no proof of a "personal interest" of Mordechai Yona or Boaz Yona in the back-to-back transactions or in the engineering transaction. The Determination Regarding the Applicability of the Section 270(1)(II) It is also not necessary in the framework of the hearing of the appeals before us, since the District Court's ruling regarding a "personal matter" is acceptable to me. I will only note that in my opinion it is not impossible that the exemption in this section can be applied to the transactions, and that in any event, the rationale underlying the exemption provision is valid even in the circumstances of the case and as detailed above.
- Interim Summary: The mechanism for approving stakeholder transactions as prescribed by law The Friendship seeks to protect the company and its shareholders from making decisions that may harm their interests, due to a conflict of interest in which the decision maker is subjected and while prioritizing his personal interest. The purpose of the approval procedures is to ensure that the transaction is approved by an organ in the company whose judgment has not been impaired by personal interests. However, in certain circumstances, the approval mechanism may be found to be futile, and this is the case at hand. In the individual case before us, each of the three transactions was executed with the consent of the two shareholders in the guarantor companies (Hefziba Investments and Hefziba Engineering) - And since the company is the property of the shareholders, halacha is a lambThe agreement of all shareholders qualifies a transaction of interested parties, even if the formal approval procedure required by law has not been taken. It was also clarified that in the aforementioned companies the shareholders are in fact also the decision-makers, and given this identity, the concern of a conflict of interest on the part of the officers (Mordechai Yona and Boaz Yona has disappeared). In addition, given the holding and management structure of Heftzibah Investments and Heftzibah Engineering, it cannot be disputed that the back-to-back transactions and the engineering transaction would have received the approval of the board of directors and the general meeting in any case to the extent that it was necessary. In these circumstances, it is clear that there is not much in the strict adherence to the permanent approval mechanism In the section 272 of the law, and the special manager did not have a reason to cancel the transactions because all the necessary approvals for the transactions were not received.
- At this point, three matters must be added and clarified.
First - In view of the result I have reached, I am not required to decide whether the back-to-back transactions and the engineering transaction were "exceptional transactions" as I put it Sections 271 and272 to the law, or not. The distinction between an unusual transaction and a non-exceptional transaction is required in order to determine which approvals are required in order to qualify it; However, once it has become clear that in the circumstances of the case in any case there is no advantage to strictly adhering to the approval mechanism, the need for this decision becomes unnecessary.