Parties Abandoned by the Parties
- I chose to address the matter in the headline, even though it does not seem to require a decision. At the same time, one should not ignore the fact that most of the sections of the statement of claim and the affidavit on behalf of a shorter should not be ignored; In addition, significant parts of Zahav's pleadings and affidavit, as well as significant parts of the investigations, were devoted to matters that are not at all subject to the hearing of this judgment. These claims constitute the claims of "color" and the background to the escalation in the relations between the parties, and in fact explain why we have come this far.
- Thus, for example, Kotzer claimed that the defendants denied him access to information relating to the company, made decisions regarding their salaries illegally, blackmailed him into signing a draconian non-disclosure agreement (paragraphs 54-55 of the lawsuit), refused to distribute MedLife dividends all these years; diverted income between the companies, and more. However, as stated above, on August 8, 2022, Kotzer signed the retirement agreement, including the date of termination of his employment with the company (September 30, 2022 - see clause 1 of the agreement), confirmed that he would act in accordance with the partners' agreement, including clause 16.4, and also confirmed that: "no additional demands or claims will be required on his part as an employee of the company, against the company or any of its managers regarding the retirement" (see clause 11 of the retirement agreement). Therefore, it is not clear how his claims of deprivation came into the world all these years, especially when Kotzer confirmed in his interrogation that the agreement was drafted jointly by the parties, see his interrogation on page 38 of line 7, and even admitted that this was the case throughout the years, when he answered the question, "You had complaints all these years": "I had complaints, I raised them in writing, I raised them orally, I had arguments, I had a lot of complaints about a lack of transparency, especially and about the very brutal behavior of the company's CEO... throughout the years, throughout all the years" (p. 22, s. 21-p. 23, s. 6).
- His claim regarding the increase in the salaries of the defendants in the company is not at all clear, since this is a decision made on January 4, 2023 - that is, after he retired from his job (see his interrogation, page 31, lines 11-17), and after the date set for the valuation (December 31, 2022); similarly, I found no substance in his claims regarding the denial of access to information regarding the companies. During the course of the proceeding, it became clear that Katzer had access to the company's banking system (page 31 of his interrogation, lines 1-14), the "privilege" system (page 46 of his interrogation, lines 5-8), and more. The aforesaid is also true with regard to short-sighted claims regarding non-distribution of dividends. See also in this matter the expert's cross-examination on page 155, paras. 6-7, when he was asked about this matter by counsel for the defendants, "In other words, the company has large cash capital as a result of the distribution of dividends, this is reflected in the value of the shares, and if the dividend had been distributed, then the value of the shares could have decreased since the capital had already left the company's coffers", and he replied: "Indeed, because in fact a shareholder would have 'met' the money of the fund, So it's a zero-sum game."
- On the other hand, there was no place, in my opinion, for the claim of "impersonation" of an engineer that was raised by the defendants at length and the damages he allegedly caused, which did not receive any evidentiary anchor (see paragraphs 92-93 of the Golden Affidavit; see the complaint to the police (!); see the proceedings in the Labor Court; see Kotzer's lengthy interrogation on this matter at pp. 16-22). At the end of the day, and after the evidence in this case was completed, Kotzer received his legal rights stemming from his work, and that's a good thing.
- The aforementioned difficult mutual claims, together with the defendants' demand to separate from DHS as well, explain the background to the deterioration in the relationship, with each party attributing to the other a lack of good faith, manipulation, and ulterior intentions. When this is the level of trust between partners, and the parties refuse to hold the bull by the horns, a judicial decision is required on the issues that remain in dispute, and I will address them now.
Is it necessary to update the expert opinion?
- Kotzer's main argument in his summaries is that there is a need to update the expert's opinion, since the defendants chose to conceal information, both from him and from the expert. Kotzer claimed that the expert himself confirmed that "MedLife's management" (see paragraph 18 of the summaries) chose not to provide the expert with significant data regarding potential transactions for which negotiations were conducted in 2022. The defendants claimed that Kotzer was the one who failed in the proceeding and did not provide the expert with the documents on which he sought to rely. I have reached the conclusion that the short-term demand to update the opinion should be rejected, both for the procedural reasons and for the factual-substantive reasons, and I will clarify.
- From the procedural aspect, the court gave its instructions even before the court's expert began his work, and see: "The examining expert will be appointed... He shall be entitled to receive all the materials available to the court, as well as any additional material that he deems appropriate on behalf of any of the parties for the purpose of preparing his opinion. If a particular party believes that it has relevant material that may affect the valuation, it may present it to the expert on its own initiative and provided that it has also been transferred to the other party" and "to the extent that any of the parties does not receive the court's expert opinion regarding the two or one of the companies, it will be entitled at its own expense to present a counter-opinion within 30 days from the date of the notice that it does not adopt any of the opinions" (see the minutes of the hearing of June 21, 2023, in paragraphs 3 and 7 respectively).
- In my decision of January 4, 2024, I reiterated my aforementioned decision and noted that: "If the opinion is not acceptable to the defendant (shorter), he must act in accordance with section 7 of the parties' consent and he has no right to cross-examine the expert." In my decision of June 4, 2024, I also reiterated what was stated throughout that: "The way to apply for clarification questions was determined and it was also determined that if any of the parties does not accept the opinion, they may submit a counter-opinion within 30 days" (section 2), see also paragraphs 7 and 9 of the decision: "If any of the parties wishes to submit a counter-opinion, they will do so together with the submission of the affidavits"... "Given the schedule for filing claims, Kotzer will submit his affidavits and the counter-opinion by September 1, 2024."
- Despite these decisions, and despite Kotzer's explicit arguments against the court's expert's findings, he did not act in accordance with the court's decisions, and in fact, until the end of the proceeding, he did not attach an expert opinion on his behalf, with the burden of proof resting on his shoulders. These words were further strengthened when it became clear during Kotzer's investigation that he had contacted two accountants in real time in order to obtain an opinion, CPA Aharon Atel and CPA Eviatar Cohen: "I was supposed to submit the agreement and my valuation, what I think in terms of the company's value, and I hired an accountant for this purpose. I paid him money, he did an initial valuation for me... His name is Aaron Atal. He gave me an initial valuation of the company" (p. 43, Q. 23, p. 44, Q. 5), and later, on p. 45, Q. 6-8: "This valuation seemed much lower to me than I thought, so I hired another accountant who deals with valuations at DCL. His name is Evyatar." Kotzer did not see fit to submit any of these opinions, and therefore, from the procedural aspect, and in accordance with the decisions given in the proceeding, Kotzer's request should not be granted, which constitutes an "allocation of improvements" and circumvents these decisions that have already been given.
- and the substantive-factual aspect. In this regard, Kotzer argued, at first, that data that was later than the date set for the valuation was concealed; He later claimed (and even more strongly in the summaries) that data and documents prior to the valuation date were hidden, for example, tender documents or various engagements with customers. I did not find any substance in the alleged concealments regarding the two sets of aforementioned documents, and I will elaborate.
- As may be recalled, the expert opinion was submitted on December 17, 2023. Prior to the submission of the final opinion and even before the clarification questions were sent to the expert, the parties contacted the expert in order to prepare his opinion (see in this regard, the expert's application to the parties in Appendix 35 to appeal the decision of the Registrar of Defendants, pp. 239-240), and the aforementioned attached a list of documents that they must produce. Following the expert's demand, both parties approached the expert with questions, and on July 17, 2023, the defendants asked the following questions: "... It is not clear why it was necessary to hand over the documents relating to the dates later than 31 December 2022... My client is of the opinion that there is no reason to transfer these documents and discuss them within the framework of the opinion, to the extent that the honorable expert believes otherwise, we would appreciate his clarification as to why these documents are necessary for him, taking into account the aforesaid, and taking into account the court's decision" (see page 238 of the appeal against the decision of the Registrar of Defendants) to this question the expert answered as follows: "If the date of the valuation is December 31, 2022, the materials are indeed not required after this date."
- Following the aforementioned response, Kotzer also contacted the expert (p. 237 of the appeal against the decision of the Registrar of Defendants) with a number of questions to which the expert answered. Thus, for example, see Question 2 which was sent by Kotzer: "On the merits, the position of the company - according to which you do not need to prepare the valuation of the documents after December 31, 2022 - is completely unfounded, erroneous on its face and even very puzzling. After all, what better tool exists to examine and validate the veracity of a company's growth forecasts (which are the main component used in valuation and which is at the heart of the dispute between the parties) than to examine it against the de facto data as of today?
To this, the expert replied as follows: