"The scope is too short to contain the economic reasons stated in my answer. In the nutshell, I will note that for every valuation and as a result, it is not possible to know at the time of the valuation information that is known after this date. This is equivalent, for example, to buying a share on the stock exchange, when the buyer weighs all the data known to him before the purchase and agrees to the price at which the seller is offered. If, for example, he had known that the company would be in excellent/poor condition after the date of the purchase, it would have been reasonable to assume that this information would affect his valuation as well as the price of the stock that purchased the share. Another example and closer to this case is that after the departure of a partner, the company collapses/flourishes and therefore the partner who left should not be harmed/benefit from the company's situation after his departure, all under the circumstances of the case. Only on this topic do we lecture for hours... All of this is true, unless God forbid something was done intentionally that would alter the financial results close to the valuation in an improper manner."
- Thus, at the beginning of his work, the expert clarified the method of valuation, while clarifying the problem in including information that is known to the parties in retrospect and after the date of the valuation. The expert further clarified that "any representation/information/economic work will be examined and not taken for granted", and that it is in the hands of the short-term judge whether to provide him with the data later than the date set for the valuation.
- Indeed, after the draft opinion was sent to the parties, the parties forwarded clarification questions to the expert - the clarification questions on behalf of the defendants were forwarded on December 10, 2023 (Appendix 32 to the appeal against the decision of the Registrar of Defendants) and on behalf of Kotzer - in an accompanying email dated December 11, 2023 (Appendix 33 to the appeal against the decision of the Registrar of Defendants), in the framework of question 2, Kotzer reiterated his arguments as follows:
"With all due respect, it is not clear to us how it is possible to formulate a general growth forecast without data for 2023, since this means a conscious disregard for reality. As you yourself noted in the email message of July 13, 2023, in which you requested to receive a "test balance of the companies for the year 2023 until the most updated date possible", it is important for the companies for 2023 (even if they are not audited/scored at this stage) in order to formulate the vegetation forecast for 2023. These data certainly indicate the actual growth trend and its compatibility with the parties' forecasts. We find it difficult to understand how you can formulate your opinion and verify a growth forecast while ignoring the actual truth data for 2023, which is about to end, and which can confirm or refute that forecast. This is especially true when there is such a large gap between the forecasts, and when you choose to rely solely on the company's data, since it is precisely in such a case that it is necessary to examine the reality and not ignore it. It is also clear that the company has a good reason to hide this data from you. 2023 is a very strong year in our estimation, as management has loaded all R&D expenses on 2022." In response to these questions, the expert answered as follows: "At the beginning of the proceeding, I explained at length that from a methodological point of view, financial data that are known retroactively after the date of the valuation should not be examined."
- Subsequently, Kotzer tried his luck again and attached additional questions to the court file (see Request 14 of January 25, 2025), in which he reiterated his claim that the companies' data for 2023 are important for the purpose of formulating the growth forecast for 2023, and even approached the court again with Request 19 to attach documents to the court file - in which he claimed that once he received the bank's printouts for the years 2019-2024, the data that were brought in the framework of the valuation should be taken into account. Kotzer further explained that in his view, the defendants were the ones who concealed the dramatic increase in cash that resulted "entirely from projects and transactions with significant profits that were signed already in 2022 and which matured in 2023" (see paragraph 7 of Request 19). Kotzer argued there that these were transactions that were already known as of the date of the valuation, and therefore the value of the company as aforesaid should be updated (and these claims were repeated even in his summaries).
- I rejected this demand of Kotzer in real time, and see my words quoted in paragraph 32 above: "At the beginning of the hearing, I referred to a request that would not advance us in any way. The real request that is pending is in fact to reopen the opinion and update it with reference to the bank's statements. Sharoni and Zahav objected to this, and the expert himself also responded to the request in a substantive manner, mentioning that it was an opinion that was made for a certain date based on forecasts. The court also noted that accepting the request to update the opinion according to the bank's statements will in fact lead to the fact that this is not a forecast but rather a retrospective opinion, after receiving real data, which will require us to follow the developments until at least 2028, for better or for worse. That's not the case."
- The expert also reiterated his position that there is no room to relate to the data that are later than the date of the valuation, see his words at p. 145, paras. 14-20: "In principle, I agree in principle that these are significant data, but as soon as we make a valuation at a certain date, we have to take into account the data known for that date, that is, if we stopped at the end of the 22nd, if these figures of the increase, Even if it was negotiations or even orders or things like that, they should have taken the valuation into account, but only if they were known at the time of the cut-off."
- Moreover, despite Kotzer's claims of concealment of documents by the companies and the defendants, including the bank documents, it became clear that Kotzer had access to these documents at all times, see his interrogation at p. 46, paras. 4-14, as well as what is stated in Motion No. 26 on behalf of Kotzer, according to which the disconnection from the bank occurred "only recently" (see paragraph 6 of Request 26, as well as my decision in the application stated in paragraphs 18-20). For all these reasons, there is no reason to update the opinion and include in it documents that are later than the date of the evaluation.
- The same is true of the claim regarding the concealment of documents prior to the valuation date, which can ostensibly shed light on the growth forecast. In his interrogation, the court's expert admitted that the more such data were concealed, the more it could have consequences, see his words on page 144, quoted above in paragraph 74, and subsequently asked by the defendants' counsel: "What do you mean? I just want to understand the answer. If these deals were known, they may not have been signed, but the negotiations as you asked for were conducted in 2022, this is something you say I should know for the purpose of weighting," to which he replied: "Not only will I know, it is also obligatory in reality," his testimony at p. 145, s. 21 to p. 146, s. 3. This is precisely the possibility that I was referring to in my remarks of June 4, 2024, when I determined that "however, I noted to the parties that if and with any shortcomings convinces the court that Sharoni and Zahav knowingly concealed receipts that were already on the agenda, or contracts or any other possible source of income that was already known until the date of the separation, it would be appropriate to take it into account, to examine with the expert whether these data were before him. Did he take them into account for the purpose of the opinion and whether, to the extent that they were presented to him, they change the picture" (decision of June 4, 2024). However, it turned out that all the documents were in the hands of Kotzer and he even relied on them in the growth forecast he gave to the expert on his behalf!
- Thus, Kotzer confirmed in his affidavit and in his interrogation that the valuations on his behalf (which included those transactions that he demanded to be included in the valuation) were included in the growth forecast. An examination of the affidavit of the main witness on behalf of Kotzer shows that all the transactions on which he sought to rely were transferred to the expert. See his affidavit in paragraph 56, where he claimed: "The huge increase in cash balances stemmed entirely from projects and transactions with significant profits that were signed and/or approved and/or were expected already in 2022 and which matured in 2023, such as Clalit Health Services..." and later in paragraph 57 he argued: "Therefore, this is not an unknown future reality, but rather a reality that already existed in 2022. In fact, I formulated the growth forecast on our behalf - within the restrictions imposed on me by the plaintiffs and under a veil of fog - on those real transactions that were all known as of December 31, 2022, and which led, as stated above, to the dramatic increase in MedLife's cash portfolio, in other words: these are transactions that were already known as of the date of the valuation and accordingly were expressed in the framework of my forecast" (emphasis mine).
- In his interrogation, too, Kotzer approved the transfer of the transaction documents - see his interrogation on this matter on page 58, lines 13-17, when he was asked: "I just want you to confirm that all these transactions, those five or six transactions that you presented to the Knesset's expert, right?" Kotzer answered this question: "In the forecast, yes, for that there was a much larger increase." In fact, in the framework of Motion 19 as well, Kotzer confirmed that he included those transactions in the framework of the forecast on his behalf, see paragraph 8 of Request 19: "These are transactions that were already known as of the date of the valuation, and accordingly were expressed in the defendant's forecast."
- The court's expert explicitly referred to the growth forecasts that were attached by the parties and explained that he did not accept any of the forecasts and therefore made a forecast himself. See the expert's answers to the clarification questions that were attached as Appendix 33 to the appeal against the decision of the Registrar of Defendants at p. 230: "The statement that my opinion is 'clearly biased' and 'one-sided' is out of place and it would have been better if it had not been said at all. Our work was conducted with maximum transparency and receiving information from all sides. As I have noted several times in our work, I have chosen not to adopt any of the forecasts of any of the parties and to produce an independent forecast", the expert even confirmed this in his interrogation, see p. 149: "Adv. Mula: Did you bring this in the framework of your calculations when you prepared the opinion? That according to him, the growth is 2% for medical equipment? CPA Avraham: I brought all the parameters of the parties, as they were brought to my attention, of course from my professional perspective and of course your eyes see that we did not receive any forecast, we went for the forecast that we see" (emphasis mine).
- Thus, all the information that was in the possession of the parties, including the information regarding the transactions that Kotzer claimed should be included in the framework of the opinion, was included in the expert's examination and later - in his opinion. Kotzer has not been able to prove that any transaction or document or negotiation that took place prior to the date of the evaluation was hidden from his eyes or from the eyes of a court expert, and therefore there is no reason to update the opinion.
The Enforcement Claim - The Defendants' Petition to Apply the Separation Mechanism Established in the Partners Agreement to the Parties in Connection with DHS