In other words, Dr. Mofkadi examined the question of what was the proper compensation that would have been paid in April 2018 for the termination of the concessions. He presented different compensation amounts on the assumption that the concession period was until the end of 2019,2020,2023 and 2028, with all the amounts being discounted as of April 30,2018. This compensation, naturally, could have been based solely on predicted estimates.
The expert explained that the reason for this is that "the only relevance to our case is to ask what was the compensation that would have been determined in real time as a result of the termination of the franchise. Real-time cannot take into account extreme scenarios that occurred afterwards" (p. 148, Q.10). Therefore, just as the proper compensation would not have been derived from later, negative or positive events, the subsequent truth data should not be taken into account. Therefore, he did not examine the loss of profits against the true data, nor would he have done so if he had been requested (p. 150, Q.16).
Dr. Mofkadi explained in his interrogation (p. 147, Q. 19-28) that he did not deliberately ask the counter-plaintiffs for their financial statements, when he wrote his opinion in 2023. He further added (ibid., s. 32 ff.) that even if the companies operating the stores had closed, he would not have attributed zero profit to the companies, and would not have taken this into account the amount of damage, but would have left the calculation as he determined in his opinion, i.e., the expected profit for those years (2018 to 2028).
We can learn about his manner of conduct from the following excerpt from his testimony in his cross-examination (p. 142, s. 27 ff.):
Every valuation, every business decision that a manager makes in real time, relies on estimates, on forecasts, and that's what I did. The question I was trying to ask was what compensation should have been determined in April 2018 in order to compensate the franchisees for the cancellation of the license. Such compensation must also be based on methodology and in my legal understanding as well, it must be based on the most reasonable forecasts that would have been made in real time and not on the actual data. And I will emphasize, this is important because it may be that in practice the performance was too good and then I overcompensate or too badly and I make up for the shortfall. For example, the Corona period, it has nothing to do with what happened in 2018 and therefore there is no need to calculate based on real data.
- Can this approach entitle the counter-plaintiffs to the compensation requested by them? In my opinion, a distinction must be made in this matter between the activity of the branch in Sderot and the activity of the branch in Bat Yam.
Compensation for the cancellation of the Sderot branch agreement
- There is no dispute that the plaintiffs could have presented the latest data of the Sderot branch, since at the time the opinion was prepared in 2023, the true data had already stood for about five years, and most of them could even be validated on the basis of audited annual reports.
An examination of the facts of the facts would have been required for the context stated in the statement of counterclaim. The counter-plaintiffs noted there that "as a result of the actions taken by the counter-defendants, there was a decrease in the stores' revenues; at the same time, there was an increase in the cost of purchasing the goods from suppliers. Additional damage that was subsequently caused was the loss of the Max Stock brand. The counter-plaintiffs made efforts that cost a lot of money in order to be able to produce an alternative death and to mitigate the impact of the loss of the brand" (paragraphs 139-140 of the counterclaim).