Civil Case (Haifa) 4806-06-22 Shmuel Gutman v. Maor Lahav - part 14

In this way, I see Maor failing and causing real harm to the activity of the company's board of directors on a subject of great importance to the company's activity and the very existence of the company...".

32. There is no need to reiterate that the decisive director is the long arm of the court, appointed to extricate the company from the impasse in which it finds itself and which endangered its existence. The conduct of a litigant directed against an official appointed by the court should be viewed with severity.  The presumption is that the office holder appointed by the court is an objective and impartial professional.  In the case of CPA Shalhav, these qualities are not based solely on assumptions.  The actions of the decisive director so far have testified that he has a proper, fair and objective position that greatly promoted the company's affairs and even saved it from destruction.  It should be emphasized that despite his serious claims, Lahav did not find a way to appeal to the court with any request.  I attribute weight to the words of the decisive director, that Lahav's actions harm the functioning of the board of directors and the functioning of the company.  The picture that the decisive director points to fits in with the rest of the prima facie evidence before me, and indicates that Lahav harms the board of directors and the company.
33. Another difficulty to which Gutman refers is a series of allegations relating to threats that were allegedly made against other officers, including at a meeting of compliance, in which statements were raised by Attorney Lahav regarding the possible liability of the officers (after which the temper flared). It should be noted that if the application had been based solely on this reasoning, it is doubtful whether this would have led to the result I have reached.  This is because it is doubtful whether these horrific remarks can be viewed as illegitimate, and in this context I have given weight to the fact that the remarks were made while presenting a professional position by an attorney (p.  30 onwards of the transcript of the board meeting of July 21, 2024).  At the same time, it is impossible to ignore the turbulent mood that the matter provoked and which caused the resignation of the CFO who was recruited for the job by the decisive director, and who by all accounts is a professional who has nothing to do with any of the parties.
34. For the sake of completeness, it should be noted that I do not believe that Lahav can be blamed for not cooperating with the actions to sell the company to third parties, because the court has not yet decided whether this is indeed the way to separate. It should be remembered that Lahav first raised the argument in his affidavit that the separation should be by way of a forced sale, and despite Gutman's request to block him from raising this claim, I did not deny him the possibility of making this claim (my decision of October 30, 2024).  Given this, I do not believe that there is anything wrong with Lahav's refusal to cooperate with the promotion of a relief that he opposes and which the court has not yet decided.  However, it should be clarified that the concern raised by Gutman and the company is the result of claims that Shalhav claims that fraud is being carried out by the company, as a two-fold move: in order to harm the company by torpedoing the possibility of selling it to third parties and an attempt to force Gutman to purchase his shares according to their historical value before the outbreak of the dispute.
35. Lahav claims that his presence on the board of directors is necessary to supervise Gutman, who serves as the company's CEO, especially in the shadow of the conflict between them. Indeed, on the level of principle, I accept Lahav's argument that there is a need to supervise the company's activity as a whole and Gutman's activity.  Lahav's concern can be answered in four ways: First, as described above, it appears that Lahav's actions spilled over far beyond legitimate and proper supervision, created a real difficulty in managing the board of directors and could harm the company.  Second, the existence of the decisive director appointed at Lahav's request, and who does his job faithfully, dulls the fear that Lahav raises.  It should be noted that in the composition of the board of directors that will be created after the removal of Lahav, decisions cannot be made without the consent of the decisive director, because he serves as the chairman of the board of directors and his voice is decisive.  Third, I intend to allow Lahav to appoint an observer on its behalf.  Fourth, the court also serves as a tool for criticism of the conduct of the board of directors and the company.
36. One of the issues that Shalhav attaches great importance to, both in his response to the request and in the affidavit of the main witness, is the issue of compliance. However, this issue was raised, with great wisdom, by the decisive director, who even placed it as one of the main issues on the agenda and began to hold a discussion on it with the relevant professionals (the compliance meeting on July 21, 2024; and even before that).  As the decisive director noted, it was Lahav who thwarted the advancement of the handling of the issue.  Another issue that Shalhav often mentions is the lack of significant expression of Bitcoin wallets in the financial reports submitted to the tax authorities.  In my decision of April 13, 2023, I noted that: "...There is an honest disagreement regarding the scope of the company's activity in this field and the wallets that should belong to the company, and it seems that there is more hidden (or perhaps hidden) than what is revealed." Without elaborating on the issue, it seems that both sides were complicit in the omissions on this issue, since Lahav, like Gutman, knew of the existence of these wallets, and before the outbreak of the conflict, reports were even submitted, in the same manner that they were submitted after the outbreak of the conflict (and later amended).
37. Admittedly, the decision to remove Lahav, who owns half of the shares, from the board of directors is an unusual decision and the court must exercise great caution when considering it (Civil Case 50306-08-16 Toledano v. Gat, paragraph 12 (February 7, 2017)), all the more so given the nature of Panda as a company that is a kind of partnership (Civil Appeal 4588/19 Kardosh-Salem v.  Kardosh & Co.  Ltd., para.  16 (April 20, 2021) (hereinafter: the Kardosh-Salem case); Civil Appeal 3432/17 Topaz v.  Yocht, para.  25 (April 16, 2020) (hereinafter: the Topaz case); Civil Appeal Authority 9646/04 Haski Alon Initiation, Construction and Investments Ltd., para.  4 (January 12, 2005)).  A shareholder in a "Maayan Partnership" company has a strong right to appoint directors as well as to participate in the management of the company and the board of directors (the Kardosh-Salem case; the Topaz case; Civil Appeal 8712/13 Adler v.  Livnat, para.  68 (September 1, 2015)).  Therefore, the dismissal of a director of a "Maayan Partnership" company has implications for his status, because he will no longer be able to influence its management, in contrast to the state of affairs on the eve of its establishment and during the company's life until his dismissal (Tzipora Cohen, Shareholders in the Company - Litigation Rights and Remedies, vol.  2, 164-165 (2008)).  However, the fact that the company is a "quasi-partnership" does not create full immunity for a shareholder, and in correspondence cases there will be no choice but to do so, and the court has taken this step more than once (see Adler, paragraphs 10-15; Tomashin; Tushiner, paragraphs 46-47; (Opening Motion (Tel Aviv-Yafo) 27955-12-17 Tulik Rakia Development in Tax Appeal v.  Olivard in Tax Appeal, paragraphs 39-42 (December 15, 2022) - although it should be noted that in this matter the possibility of replacing the Board of Directors was regulated in the Founders' Agreement)).

The backlog of data that I have detailed in detail and the conclusions that arise from them regarding Lahav's conduct, its impact on the activity and functioning of the board of directors and the company, leave no choice but to order Lahav's removal from the company's board of directors.

38. Therefore, I decide to accept the request and determine that from now on Lahav will not have the right to vote on the board of directors. I also prohibit Lahav from attending or taking part in board meetings.  Lahav will be entitled to appoint an observer on its behalf on the board of directors, who will not have the right to vote.  The name and details of the observer will be transferred to the decisive director within 10 days from today.  It should be clarified that there is no impediment to the observer being one of the Lahav attorneys.

Request a blade

39. Lahav asks for a number of orders. The first is to instruct Gutman to provide information to the board of directors regarding the company's situation.  The second is to issue orders whose purpose is to prohibit Gutman and the company from taking any action in connection with the investigation of the German authorities without receiving the requested information and without informing the board of directors thereof.  Third, an order is requested that will prevent the execution of any action regarding a criminal or regulatory investigation before receiving the said information.
40. Before reviewing the parties' arguments, we note that this is not the first time that Lahav has submitted a request for information. On May 27, 2024, prior to the pre-trial that took place on June 2, 2024, a request was filed for an order to compel the company's board of directors to convene and discuss the matter of compliance, in which it was requested to present all the relevant documents on the subject of compliance.  In the pre-trial hearing that took place on June 2, 2024, I decided to delete the application, with Lahav's consent, in light of the fact that the decisive director announced that he intends to convene a board meeting in which the issue of compliance will be discussed, and that the materials related to compliance will be transferred to Lahav before the meeting.  It should already be noted that according to Gutman, the aforementioned materials were transferred to Lahav on June 4, 2024, and at the board meeting on July 21, 2024, the CFO appeared and submitted a financial report (which, according to Lahav, is insufficient).

The parties' arguments

41. In the present application, Lahav referred to his arguments raised in the previous application. According to him, he has the right to request the presentation of the information, while he is excluded from the company and does not have information.  Lahav claimed that Gutman continues to conceal information from the board of directors and conditions the provision of information on the granting of an exemption and indemnity that is retroactively applicable.  According to Lahav, the obligation to provide information was not fulfilled, board meetings were not held, and Gutman's behavior worsened, and recently he discovered that Gutman was hiding information that could put the company at risk.  According to Lahav, during Gutman's tenure, the company's situation deteriorated, both from a regulatory and financial standpoint.

According to the claim, Gutman managed the company while carrying out serious actions of violating the law and causing risk to the company and its officers, inter alia by committing criminal acts through the Comma software and submitting false reports (according to him) to the tax authorities.  Lahav also refers to an investigation being conducted in Germany against the background of suspicions of criminal acts regarding a relationship with one of the clients, and claims that he is excluded from information in connection with this investigation, and that the matter was not discussed by the board of directors despite his repeated requests.  Lahav argues, as noted, that Gutman's conduct also causes risks to the company on a financial level and endangers its existence.  In the meantime, Lahav claims that Gutman is acting for his personal interests and delaying the handling of the company's affairs for improper motives.  Lahav added that he contacted the decisive director on September 11, 2024 to receive the information requested by him, but by the time the application was submitted, no information had been received.  Lahav claimed that he has not been involved in the management of the company for the past three years, and despite this, he is working vigorously to advance its affairs.  He further rejected the claims raised by Gutman that he is intimidating the company's officers, and noted that he is acting by virtue of his duty to supervise the company's activities through the board of directors.

42. Gutman asks that the request be rejected. According to him, the current application is nothing more than a repetition of the previous application that was deleted.  According to Gutman, the request was filed in bad faith in order to serve as a counterweight to his request, and it constitutes another step "in Lahav's incessant campaign of sabotage, disruption and harm to the company," which is intended to destroy the company in the sense of "my soul will die with the company," in Gutman's words.  According to Gutman, Lahav was unable to point to a duty imposed on him by the board of directors or the chairman of the board.  It was argued that a director is not entitled to demand information and the right is given only to the chairman of the board of directors.  This is even more pronounced, Gutman continues, where the court appointed a director to serve as chairman of the board of directors.  Gutman rejects the claim that no information was provided about the investigation in Germany, and added that Lahav himself prevented another hearing on the matter of the investigation in Germany.  Finally, it was claimed that Gutman submitted reports to the board of directors as part of a review he carried out at the request of the chairman of the board.  According to Gutman, the request lacks an evidentiary basis as to the claim that he breached his duties to the board of directors because he never refused any demand that came from the board of directors to provide information; Nor are the substantive claims of concealment of information true.  Gutman claimed that Lahav has broad access to all financial information, which it misuses, and referred to decisions in which Lahav was provided with broad access to the information.  As for the investigation in Germany, it was claimed that it was Lahav who chose to disrupt the activities of the board of directors and prevent discussion of the matter.  In the meantime, it was claimed that Lahav is a suspect in the investigation being conducted in Germany and therefore has more information than the company.

Gutman points out that even in the application under discussion, Lahav continues to intimidate the gatekeepers, including the decisive director, and that this is intended to warn him of fulfilling his duties.  Gutman believes that the balance of convenience clearly tends to reject the application, inter alia, because it is a request for injunctions intended to interfere with the company's ongoing operations and the activities of the chairman of the board of directors.

43. The company submitted a response in which it was stated that it was submitted with the opinion and consent of the decisive director, in which it requested that Lahav's application be rejected for reasons of delay, lack of good faith and lack of cleanliness. In the response, it was argued that this was a vague request whose scope was unclear, it lacked basis and expressed an extreme shift that was contrary to the company's interests, because this thwarted the possibility of representing the company in the framework of the investigation being conducted in Germany.  It was further argued that contrary to Lahav's claim, the decisive director was the one who requested to hold another hearing on the issue of compliance, but Lahav thwarted this, which according to the company is inconsistent with the request for temporary relief.  In this context, it was claimed that it was agreed, at Lahav's request, to coordinate a meeting between the lawyers accompanying the investigation in Germany, but this meeting did not take place due to Lahav's refusal.  According to the company's approach, Lahav is not interested in resolving the issues that require discussion on the board of directors, which indicates that the company's best interests are not in his mind, but that all he wants is a fight against Gutman.  It was also claimed that Lahav is making various claims, all in order to drive a wedge in the legal process, including the claim that he has no access to the information, while the actual state of affairs is not.  The company, it is claimed, did not hide any information from Lahav on any subject he claimed.  According to the company, Lahav conducts itself incoherently and its conduct changes according to its personal needs.  For example, Lahav opposes taking steps to manage the risks of the investigation in Germany, but on the other hand, complains that the company is not properly prepared.  In the meantime, the company notes that the person who first raised the issue of compliance in the board of directors was the decisive director, while Lahav did not ask for it when asked to raise issues for discussion.  The company noted that the first meeting on the subject of compliance was held on August 21, 2023, after which an in-depth process was held to examine the compliance procedures, and another meeting was delayed due to Lahav's conduct, until a meeting was held on July 21, 2024, in which a comprehensive review was given by the company's attorney regarding the issue of compliance.  It was claimed that after this meeting, Lahav prevented a meeting between the lawyers for the purpose of discussing the investigation in Germany, after which another board meeting was planned.  The company further argued that the requested remedy may negate the discretion given to the company's management and transfer it to the board of directors while undermining judicial decisions.  The company sought to reject the claims raised by Lahav regarding risks at the regulatory and financial levels, which it claimed was lacking any basis.  The company also sought to reject the claims made by Lahav regarding the Comma system, and noted that there is a reason for the flaw in the fact that Lahav claims that there was no discussion in the board of directors on compliance issues, but on the other hand, he argues for the first time on these issues in the affidavit of the main witness.

Decision

44. In light of my decision to remove Lahav from participating in the meetings of the Board of Directors, to a large extent, the discussion of this request is superfluous. But even ignoring the outcome of Gutman's request, the request should be rejected.  Efrett -
45. Lahav's request consists of two heads: one is to instruct Gutman (in his capacity as CEO) to submit reports to the board of directors, what Lahav called the "request for reports," which Lahav bases on section 122 of the Companies Law; and the second, to obligate the board of directors to convene and discuss the matter of compliance, which Lahav called the "request for compliance," which is based on section 257 of the Companies Law.
46. Before I discuss the arguments on their merits, it should be noted at the general level that the decisive director also serves as the chairman of the board of directors, and by virtue of this he has many powers to convene and conduct meetings of the board of directors (sections 99-104 of the Companies Law), at his discretion. Doc: The board of directors in the case before us is very active and even very active and discusses a number of issues, including the issues mentioned by Lahav.  It is even possible to get the impression that the chairman of the board of directors consults with the directors about the agenda.  Lahav therefore tries to create its own agenda, ignoring the activities carried out by the board of directors under the guidance and supervision of the decisive director.  Lahav claims that the decisive director "is extremely one-sided in favor of Gutman," but his claims are inconsistent with the data presented by the decisive director.  In this context, I will note that despite Lahav's harsh allegations against the decisive director, no request was ever filed with the court in this matter, and the statements are made in the framework of motions filed by Lahav against Gutman or Lahav's responses to Gutman's requests.
47. At the meeting on June 2, 2024, a similar previous request submitted by Lahav was deleted, after the decisive director noted that a board meeting was scheduled to convene to discuss the question of compliance that was on the agenda. Indeed, on July 21, 2024, the Board of Directors convened to discuss compliance issues.  At this meeting, the issues were presented by a lawyer who specializes in these issues, and counsel for the parties was also present (in business parallels, 11 lawyers and 2 interns).  The minutes of the meeting are no less than 50 pages.  At the end of the meeting, the decisive director set instructions regarding the continuation of the matter (p.  49 of the minutes of the compliance meeting).  The decisive director then tried to promote the issue (see Appendix 11 to the company's response).  On September 4, 2024, the decisive director wrote to Attorney General Lahav: "Matters of compliance and Germany take a significant priority for me over any other issue.  A preference that is expressed in practice", and also: "In my opinion, a deep and thorough treatment is not necessarily an immediate meeting of the board of directors, but rather a thorough and comprehensive preparation, reducing gaps in views from the discussions of the legal teams prior to the meetings will be very helpful" (Appendix 1 to Gutman's response to the company's request).  This also emerges from the letter of the decisive director, which was quoted extensively in the hearing on Gutman's request.  The decisive director should therefore be allowed to deal with the issue, which he began to deal with on his own initiative.
48. Beyond that, there are many difficulties in what Lahav is wanted in connection with the investigation in Germany. First, the requests raised are general requests ("to take any action in connection with an investigation in Germany") that also refer to events that have not yet arisen ("any action in connection with a criminal or regulatory investigation").  Second, it is not clear what purposes these remedies are intended to promote, especially in light of the fact that there is no demand of any authority on the agenda.  Third, the remedies sought are liable to be illegal, because the remedies may be liable to legitimize non-cooperation with the authorities.  Moreover, the implicit point of departure of the requested remedies may be interpreted as an attempt to disrupt cooperation with law enforcement authorities, or that the information requested by the authorities (to the extent requested) will be the result of coordination.  Finally, it should be remembered that in the framework of the investigation that is being conducted in Germany, Lahav is also a suspect himself, so there may be a mismatch between the interests of the company and the interests of its officers.  In this context, it should be said that the existence of the decisive director may help solve the aforementioned difficulty.
49. The application is therefore denied.

Company Application

50. The Company is requesting the Court to order the amendment of the Company's Articles of Association by adding provisions that will enable the granting of exemption and indemnification (hereinafter for the sake of brevity - indemnification, unless otherwise stated), in accordance with the wording formulated by the Company's counsel and the decisive director. Alternatively, it is requested to instruct that the decisions made by the Board of Directors on the subject of indemnification, including regarding the amendment of the Articles of Association, will bind the Company without convening the shareholders' meeting.

The parties' arguments

51. According to the company, the request is intended to enable the company's officers to function properly in the shadow of the sharp dispute between Gutman and Lahav, and thus to protect the company's interests. According to the company, Lahav, who does not hold any managerial position in the company other than being a director, harms the company, inter alia by making false claims that harm it, promotes his personal interests, behaves in a confrontational manner, and threatens to file future lawsuits against the company's officers.  In light of this, the company continues, the company's officers and employees feel that their actions are being examined by Lahav and that they are in constant fear that discourages them from performing their duties properly.  According to the company, the matter reached its peak at the July 21, 2024 meeting, during which threats and warnings were made by Lahav and his representative, which led to the resignation of the company's CFO.  The company goes on to claim that this conduct is not new, and that in the past, various threats and insinuations were directed at the company's legal advisors and the auditor.  In the company's request, which was also submitted with the opinion of the director, it was claimed that Lahav began to make innuendos regarding the cleanliness of the decisive director's hands, and that threats were even directed at him.  According to the company, Lahav is creating paralysis in the company as part of his campaign of revenge, as Gutman did.  The Company therefore wishes to allow its employees confidence in the performance of their work, and for this purpose a proposal was placed on the table of the Board of Directors formulated by the Company's counsel in cooperation with the decisive director to grant limited letters of indemnity to officers of the Company (except for directors who will be excluded from the arrangement), which will apply from the date of the appointment of the decisive director (Appendices 3 and 4 to the application).  However, since the articles of association do not include provisions for indemnification, the articles of association must be changed, but the matter is under the jurisdiction of the general meeting, and the general assembly is paralyzed due to its confrontational composition - Lahav and Gutman.  The company notes that Lahav agreed to amend the articles of association in such a way that indemnification will be given only to the position of CFO and not to other officers, and that it also opposes the possibility of granting a retroactive exemption.  The proposals were discussed at the board meeting on September 8, 2024, but afterwards a general meeting was convened at which no decisions were made due to disagreements between Lahav and Gutman.
52. Gutman sees eye to eye with the company's request, and claims that the request is the result of Lahav's actions to prevent the company's proper operation in order to serve its interests. According to him, Lahav's actions were intended to thwart the decision made by the company's board of directors while abusing his power at the general meeting, all as part of a campaign of revenge against him.  According to Gutman, Lahav should be prevented from using the decisive power reserved for him at the general meeting, similar to the court's ruling in a decision of September 18, 2023.  Gutman sought to clarify that the indemnity that will be given to him is due to his position as CEO and not as a director, and that the indemnity will be given to other employees but not to the decisive director and Lahav, since the latter does not hold a managerial position.
53. Lahav objects to the request and at the beginning of the response, he argues that in practice it is intended to serve Gutman, who in turn exploits his excess connection to the company to promote personal interests. Lahav complains that the amendment to the bylaws in a broad manner will allow for the granting of an exemption to all officers automatically, without further discussion; And even this while granting an exemption to entities that are not "officers".  This move, it is claimed, will lead to the granting of a retroactive exemption from liability for wrongful acts committed in the past in the matter of compliance as well as in the matter of the COMMA system.  On the other hand, Lahav added, Gutman does not disclose all the information regarding compliance issues and the investigation being conducted in Germany.  Lahav also complains that the promotion of the discussion by the decisive director on the issue of exemption and indemnification is intended to serve Gutman "and his doers" (as he puts it), a place where he has many serious allegations against Gutman, under whom he says the company is committing criminal acts.  Lahav further raised arguments (raised by him at the meeting of the board of directors and at the general meeting) regarding the broad wording proposed by the company's counsel, its retroactive applicability, the difficulty in granting indemnification on the eve of the court's decision on the issue of separation, and the significance of the retroactive exemption, which may prevent shareholders from filing a derivative claim.  Lahav argued that there is no reason to justify granting indemnity, let alone an exemption retroactively, while changing the company's conduct since its inception, and that the good of the company does not require this.  Lahav further argued that one should not follow the path set out in the court's decision of September 18, 2023, and listed a series of differences between the situation there and the case before us, including - the nature of the issue at hand, the evidence presented by Lahav on the issue of compliance, the fact that the issue of indemnification is not at the core of the dispute between the parties and was not included in the pleadings, and the fact that Lahav did not sweepingly refuse to amend the bylaws and agreed to grant an exemption to the CFO (and in the supplementary argument he even noted that he "agrees to exempt officers without retrospective").  Section 6), and it was Gutman who insisted on a sweeping exemption.  In conclusion, it was argued that the requested temporary relief was intended to change the existing situation and not to preserve it, and that the granting of an exemption and indemnification would lead to damage to the value of the company, "due to the creation of an indefinite and unassessable debt, while these claims and their consequences are only increasing" (paragraph 22 of the supplementary argument).

Decision

54. Section 258 of the Companies Law states that a company may not exempt an officer from his liability due to a breach of trust towards it, but the company may exempt an officer from his liability in advance due to damage caused by a breach of the duty of care towards it, provided that a provision to this effect is set forth in the articles of association (section 259(a) of the Companies Law). The significance of an exemption for an officer is a waiver by a company in advance of the right of a future claim that it may have against an officer, for damage caused to it due to a breach of the duty of care on the part of the officer (Zohar Goshen and Assaf Eckstein, Corporate Law, at p.  281 (2023) (hereinafter: Goshen and Action).  Moreover, a company may indemnify an officer for liability or expenses defined in the law due to an action he took by virtue of his position as an officer (section 260(a) of the Companies Law).  In order for the officer to be indemnified, the articles of association must include a provision regarding indemnification as set forth in section 260(b) of the Companies Law.  If so, in order for it to be possible to grant indemnity or exemption, it is necessary to anchor this possibility in the bylaws.

Forindemnification for breach of the duty of care may have, in principle, a number of purposes: first, providing incentives to recruit high-quality officers and reducing the fear of potential officers to serve in the position; second, reducing the chilling effect that may arise among officers from making risky decisions, which may advance the company's goals and maximize its profits (Derivative Claim (Tel Aviv Economy) 35114-03-12 Ashash v.  Attia, Paragraph 64 (June 24, 2015); Derivative Claim (Central District) 11266-07-08 Stabinsky v.  Pacifica, para.  44 (April 8, 2013); Joseph Gross, Directors and Officers in the Era of Corporate Governance, at p.  519 (2018)); Third, the existence of an indemnification arrangement may encourage officers to conduct a defense against improper claims knowing that the company will cover the costs of defense (Tzipora Cohen, Company Officers - Ways to Release Them from Liability 23, at p.  236 (2023) (hereinafter: Tzipora Cohen, Officers)).  Alongside the positive purposes, granting an exemption or prior indemnity may encourage excessive risk-taking and reduce the incentives for officers to make more accurate decisions (Tzipora Cohen, Officers, at p.  225).  We emphasize that these purposes must be examined with the necessary adjustments, in view of the nature of the company's activity in the case before us, and the identity of the officers.

55. The granting of an exemption and indemnification is conditional on the company's articles of association anchoring this possibility. The company's articles of association in the case before us are meager articles of association that include a few clauses and do not contain provisions for exemption or indemnification.  The company's articles of association as they were registered at the time of its incorporation will be effective from the time of its incorporation (section 16 of the Companies Law), but the law allows the company to change the articles of association by a decision made by a regular majority at the company's general meeting, unless the articles of association stipulate that a different majority is required (section 20(a) of the Companies Law).  It should be recalled that the General Assembly is composed of Gutman and Lahav, and in view of the contradictions between them, in the absence of the agreement of both of them, it is not possible to change the bylaws.  It should be noted that there is a remedy for this as well, since within the framework of the remedies of section 191 of the Companies Law, the court can grant relief of amending the articles of association (Goshen and Eckstein, at p.  328; Administration, paragraph 44), and as I noted earlier, there is no impediment to extending this remedy as a temporary remedy in the appropriate case.

Moreover, the principle of good faith may also be weakened in situations of deadlock at the meeting, which is given specific expression in section 192 of the Companies Law, which states as follows: