Tadam (K.S.) 11972-04-21 Alex Hillman vs. Robert Schatzen

Before                  Honorable Judge Shirley Forer Tiomkin

Plaintiffs                                  Alex Hillman

Against

Defendants                    1.  Robert Schatzen

2. Ofer Yitzhak Rafaeli
3. Naaman Itzhaki

Judgment

Before a financial claim to charge the defendants the debt of a company, which was liquidated in a voluntary liquidation proceeding, based (according to the plaintiff) on a false or at least negligent affidavit.

1. The Undisputed Facts
2. On July 22, 2016, the plaintiff filed a monetary claim in the amount of NIS 45,139 against S.A.I. Clubs Ltd.  (hereinafter: the "Company") and against the defendants, shareholders and directors of the Company at that time, in the framework of the Civil Appeal 39200-07-16 (hereinafter: the "Previous Proceeding").

In the previous proceeding, the plaintiff, who is an accountant by profession, claimed that the company and the defendants did not pay him the full fees for his appearance as an expert witness on their behalf, in the framework of a lawsuit that the company conducted against the Tel Aviv Municipality (CA 2333/06).  In the framework of the previous proceeding, the Company filed a Third-Party Notice against "Bestin Management Corporation" (hereinafter: the "Third Party Notice").

2. On March 16, 2017, after the opening of the previous proceeding, the defendants, all together, signed an affidavit of solvency, in which they declared, inter alia, as follows: "We have carefully examined the state of the company's business, and we have come to the conclusion that the company is able to pay its debts in full, within twelve months after the beginning of its liquidation."
3. On July 13, 2017, as part of the company's general meeting, it was decided to voluntarily liquidate the company and appoint defendant 1, a lawyer by profession, as the liquidator of the company. Notice of voluntary liquidation and appointment of a liquidator was published in the Official Gazette on July 30, 2017, in which it was noted, inter alia, that any creditor who has claims against the company will file his claims, together with his proofs, within 60 days from the date of publication of this notice on behalf of the liquidator.
4. On December 1, 2017, defendant 1, as the liquidator of the company (in voluntary liquidation), signed a final report addressed to the Registrar of Companies where, inter alia, the following was recorded (paragraph 2 of the report):

"The liquidator's report that was submitted to the general meeting is as follows:

1. The company was established on November 20, 1996.
2. The company's main area of business was banquet hall management.
3. Details of the company's assets on the eve of the liquidation decision – no assets
4. Details of the company's liabilities on the eve of the liquidation decision - no liabilities
5. All of the company's assets were realized, all of its liabilities were liquidated, and the company repaid its debts in full.
6. The company's books, liquidator documents and the company's bookkeeping will be kept by the liquidator for five years from the date of liquidation of the company."

(My emphases, S.P.T.)

5. On June 27, 2019, the Registrar of Companies confirmed that the company's status was changed to "liquidated".
6. On January 5, 2021, a judgment was given in the previous proceeding by the Honorable Registrar Lerner, in which the personal claim against the defendants was dismissed and the claim against the company was accepted in full, which was obligated to pay the plaintiff the full amount of the claim in the sum of NIS 45,139, together with court fees and attorney's fees in the sum of NIS 4,514 (hereinafter: the "Judgment Amount"). The notice to the third party was rejected without an order for costs.
7. Summary of the parties' arguments
8. According to the plaintiff, the defendants signed a false and at least negligent affidavit of solvency, since they were well aware of the existence of the previous proceeding, and did not guarantee financial reserves for the payment of the judgment when it was granted. He further claimed that by entering the company into a process of voluntary liquidation to the point of liquidating and deleting it completely, they prevented the plaintiff from collecting the company's debt to him, according to the judgment, while in the framework of the final report it was even falsely declared that all of the company's liabilities had been cleared and that it had repaid its debts in full, ignoring the previous proceeding.  Therefore, the plaintiff is of the opinion that the defendants should be personally obligated to pay the amount of the judgment.

In addition, the plaintiff claimed that he had learned by chance that the defendants had entered the company into a voluntary liquidation proceeding, and when he raised this in the framework of the previous proceeding, defendant 1 declared, during a pre-trial hearing on February 13, 2018, in which he also represented defendants 2 and 3, that the defendants had filed an affidavit of solvency, since they were behind the claim (Appendix 9 to the statement of claim).  This declaration shows, according to him, that the defendants have assumed responsibility for the payment of the amount of the judgment.