In paragraph 70.g of the plaintiff's summaries, it was claimed that Odan Enterprises' debt to Hasson Gesher was offset from a right that Odan Services had towards Hasson Gesher, which is not possible, if we are dealing with three separate legal entities. This argument also does not support the plaintiff's claims. The offset of debts can also be an accounting matter that was not clarified in a manner that supports the claims of the plaintiff and defendant 1 actually provided him with an explanation (p. 249 of the transcript, paras. 1-13), and in any event they are consistent with the general framework of the fictitious corporate structure of the parties' business, but not necessarily with a partnership.
- In paragraph 48 of his summaries, the plaintiff referred to a list compiled by CPA Elron (P/15) entitled "The Odan Group" and claimed that CPA Elron did not give a reliable explanation for this title and that the only reasonable interpretation is that the companies are all under one control. As stated above, this document is only consistent with the fictitious nature of the corporate structure and its ownership - it was indeed an "empty shell", a fact that is not in dispute and was established in the amended indictment. Moreover, the explanations of CPA Elron in his interrogation that he compiled the list in a way that linked those who negotiated with him regarding legal fees, or who referred files to him (p. 187 of the transcript, paras. 18-23) are not contradicted and are not reliable in my opinion. It is logical for a professional to compile customer lists in a way that makes it easier for him to calculate his fees, and the practice he presented - linking customers who came from a common source - is quite reasonable.
- Another set of arguments in the plaintiff's summaries relates to the "proprietary element" of the alleged partnership and the equal division between the plaintiff and defendant 1. In paragraph 47 of his summaries, the plaintiff claimed that in every entity that was established and every asset purchased by the parties, there was a clear division of "50-50", which indicates a partnership in fact. I am unable to accept this argument since, as stated above, an equal distribution of profits does not necessarily attest to a partnership, as opposed to a corporate framework. Both a partnership and a company can exist in such a way that their controlling shareholders share in any relationship, including half to each party, and the fact that the parties have chosen to share equally does not indicate the intention of a partnership. Moreover, the reference in this section (paragraph 17) to defendant 1's statement in his interrogation that "in general we considered ourselves shareholders" (p. 239 of the transcript, para. 11), since this contradicts the plaintiff's claim.
This is also the case with respect to what is claimed in paragraphs 50-51 of the plaintiff's summaries regarding the manner of engagement with other rights holders. First, as stated, this mode of engagement is not limited to the partnership specifically. Second, in any event, there is no dispute that the corporate structure of a number of manpower companies was fictitious, so that nothing can be learned from it regarding the original intentions of the parties regarding the manner of engagement between them and their intentions afterwards. Similarly, the claim regarding an equal distribution of the funds collected from the foreign workers, which proves equal entitlement to movables (the funds), does not prove participation in them in the legal sense.
- The same is true with respect to the claims regarding the "managerial element", in paragraphs 53-54 of the plaintiff's summaries. The division of duties described between the parties does not necessarily support the existence of a partnership and can also exist in a corporate structure. As for the absolute control over the management of the companies despite all the officers registered in them, this stems from the fictitious structure and not from an engagement within the framework of a partnership.
- The plaintiff also referred to the equal distribution of profits in connection with the "residual element", in paragraph 60.b of his summaries, in which he refers to the testimony of Dovrat according to which defendant 1 paid for his son's studies from within the company. Dovrat explained that "this was Adi's private expense, so Toby would also receive a check" (p. 208 of the transcript, para. 5). Even in the corporate structure of a company, funds are withdrawn by the shareholders for private needs. This is an accounting matter, and ordinarily such a withdrawal is recorded as an owner's withdrawal with all that this entails. If defendant 1 acted in this way from time to time, while "balancing" between them, it does not mean that it is a partnership.
- The Claim Against Defendant 2
- It is not clear why the lawsuit was filed against defendant 2. It was not claimed that defendant 2 was the plaintiff's accomplice. In fact, the only fact linking him to the dispute is that he served as a director of Edgar and A.M. Management and as CEO of Edgar since 2011.
- Defendant 2 also did not hold these shares from the companies. The statement of claim does not address him with concrete remedy, other than a general formulation that the "defendants" must perform calculations in connection with the alleged partnership. In the affidavit, the plaintiff also reiterated the claim that the partnership was between him and defendant 1 (paragraph 6). In paragraph 8, the plaintiff writes that the accounting is with defendant 1.
- In summary, there is no basis for a claim against defendant 2 and it would have been better if it had not been filed against him in the first place.
- Also with regard to defendant 2, I saw fit to note that the plaintiff's argument in paragraph 74 of his summaries that the failure to give testimony on his behalf contributes to proving that the manpower corporations were controlled by the parties is also rejected. The fact that the manpower corporations were controlled by the parties is not in dispute in any case.
VII. Conclusion
- In view of all of the above, the claim is dismissed.
As for court costs: In view of all the circumstances, the amount and complexity of the lawsuit, the many hearings, including 4 evidentiary hearings, the plaintiff will pay defendants 1-4 legal expenses in the sum of ILS 230,000.
- Now it remains to clarify the counterclaim. Prior to the issuance of an order for evidence, I saw fit to schedule a hearing in the presence of the plaintiff and defendant 1 for April 6, 2025 at 8:30 a.m. (one hour).
Given today, March 18, 2025, in the absence of the parties.