(2) Officer Gila to the Company, A reasonable time before the date of the confirmation hearing, The essence of our personal interest in the action, Including any material fact or document.
(II) The company's approval for non-material transactions will be given in accordance with the provisions of Chapter V regarding the approval of transactions, and the company's approval for material actions will be given in accordance with the provisions of Chapter V regarding the approval of unusual transactions; Provisions of Chapter V Regarding the Validity of Transactions, will apply, Required changes, Regarding the validity of actions.
It is now possible to refer to the description of the transactions, to present the position of the Special Manager regarding them, and to the District Court's decision in relation to each of the transactions.
Civil Appeal 7594/16 - BTB Mizrahi Transaction
- On December 25, 2003, Mizrahi Bank provided a loan to Heftziba Shikun in the amount of ILS 50 million; and Hefziba Shikun transferred the loan money to Hefziba Investments, which in turn deposited this amount in full in a closed deposit that it pledged in favor of Mizrahi Bank to repay that loan. As already noted, we are interested in the "back-to-back" transaction: the loan was given in exchange for the mortgage of the loan funds themselves in Hefzibah Investments' account, in order to ensure the repayment of the loan to the bank. At the request of the companies, a year later, the loan was renewed for another year, along with other loans using the same method. The loans were renewed at the end of 2005 and at the end of 2006, for one year at a time, for a cumulative sum of ILS 75 million (these transactions will be referred to together above and below): Transaction BTB Mizrahi).
Both Heftziba Shikun and Heftziba Investments were, as mentioned, private companies: 75% of the shares of Heftzibah Shikun They were held by Mordechai Yona, and the rest were held by his wife Hefziba Yona; Mordechai Yona also held 70% of the ordinary shares and a management share of the Heftziba Investments, and his wife held the balance of the ordinary shares. At the relevant time, Mordechai Yona and his son, Boaz Yona, served as sole directors of both Heftziba Shikun and Heftziba Investments.
- On each of the dates on which Hefziba Shikun took out or renewed a loan, Hefziba Investments signed a "Unlimited permanent guarantee in the amount to secure any debt" - According to which Hefziba Investments undertook to guarantee Bank Mizrahi for the settlement of Hefziba Shikun debts (hereinafter: Letter of Guarantee); And so on "Special Offset Letter" in the framework of which Hefziba Investments declared that in order to realize the guarantee, Mizrahi Bank has the right to offset any amount that will be available to it in its accounts (hereinafter: Deed of Offset). The last time the letter of guarantee and the deed of offset were signed by Hefziba Investments on February 14, 2007. At the same time, a written decision was also signed by Board of Directors Hefziba Investments, regarding the provision of a guarantee to Mizrahi Bank for the debts of Hefziba Shikun in the amount of ILS 75 million; The decision also determined that Boaz Yona and/or Mordechai Yona are authorized to sign a letter of guarantee on behalf of the company according to the wording of Bank Mizrahi (hereinafter: Hefziba Investments Board of Directors Decision or The Board of Directors' Decision). [It should be noted that there is another signed version of the Board of Directors' resolution, identical to the one described in one difference - that Boaz Yona alone was determined to be authorized to sign a guarantee in favor of the bank on behalf of the company; However, these words are said only for the sake of order, since this detail has no significance for our matter.] The decision of the board of directors was also signed by Adv. Sharon Cohen, who served as Hefzibah Investments' representative, and confirmed on the decision that it was made in accordance with the company's incorporation documents; that the composition of the signatures indicated in the resolution is binding on the company; and that all the approvals required by law for the purpose of this decision have been obtained, including The Chapter The Fifth To the sixth part ofCompanies Law (which deals with the approval of stakeholder transactions).
- Shortly before the collapse of the Hefziba Group, at the beginning of August 2007, Mizrahi Bank was concerned that Heftziba would not be able to meet its obligations, and therefore on August 2, 2007, the bank made the loans available for immediate repayment - In the process, he "broke" the deposit that was managed in Hefziba Investments' account, which at the time stood at ILS 76,307,717, and used the funds to repay the loans taken by Hefziba Shikun (at that time the bank owed ILS 77,349,433).
About six years after Mizrahi Bank realized Hefzibah Investments' guarantee, in August 2014 the Special Manager submitted a request as part of the liquidation proceedings - Order the cancellation of the exercise and the return of ILS 76,307,717 to the liquidation fund of Hefziba Investments. According to the position of the Special Manager, the officers of Hefziba Investments (Mordechai Yona and Boaz Yona) were the owners of the Personal interest In a deal BTB Mizrahi, in light of Mordechai Yona's holding in Hefziba Shikun shares. Therefore, and since this is an "unusual transaction" as aforesaid In the section 272 30Companies Law, Hefziba Investments' decision regarding the provision of a guarantee for Hefzibah Shikun's obligations to Mizrahi Bank should have received approval from both the board of directors of Hefziba Investments and the shareholders' meeting of this company (in the absence of an audit committee in the company) - However, approval from the shareholders' meeting was never given. In addition, the Special Manager believes that the entire purpose of the transaction BTB Mizrahi was "beautifying" and illegally "inflating" Heftziba Investments' balance sheet - and this purpose is illegal and therefore cannot be considered a transaction For the benefit of the company As required In the section 270 30Companies Law. for each of these two reasons, and accordingly To the section 281 According to the law, Hefziba Investments is allegedly entitled to cancel the letter of guarantee and the letter of offset that it provided to Bank Mizrahi - The bank must return the money it forfeited from her account.