The corporate veil does not protect officers from bad faith tortuous acts made by them

May 20, 2019
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The legal update was published in Afik News 284 05.06.2019

תא (רח') 4959-03-19 י.גלדור מחזור ויזמות בע"מ ואח' נ' נתנאל יעקב פאוסט ואח', 20.05.2019, בית משפט השלום ברחובות, כב' השופטת רנה הירש

Purchasers of an apartment filed a claim against the contracting company as well as against managers of such company.
The Court rejected the motion to dismiss the claim against the manager. Actions of an organ of a company are the actions of the company, which enable attributing to the company actions of an officer. However, attribution of an organ’s action to the company does not diminish the personal liability that the organ carries. This is the case, for example, in bad faith negotiations, as contended here. If a manager negotiated in bad faith, the corporate veil will not afford the manager any protection.