The liquidation of a company is a procedure that brings to an end the functioning of a corporation as a business.
At times, liquidation enforces the collection of the outstanding debts of the corporation to its creditors. This can be accomplished, among other methods, by suing the director of the company as part of the liquidation proceedings. Articles 373-374 of the Company Act are applicable here. While this is indeed one of the strategies that may result in the collection of the debt, we should keep in mind that holding the company director personally liable is indeed an exceptional measure, and one the Court does not approve of easily.
On January 31, 2000, an exclusive distribution agreement was signed between Israeli companies, Dessco Wood Products (1987) Ltd. and Yaad Pirzul 1984 Ltd. (hereinafter: "Dessco") and a Chinese company called Taiming Enterprise Holdings Ltd. (hereinafter: "Taiming”). The essence of the agreement was the exclusive distribution of Taiming products - metal rails and drawers, designed for kitchens and furniture, in Israel and the Palestinian Authority. The agreement was signed for one year, extended for another year, and then was extended to an unlimited period of time because of the mutual satisfaction of both parties. The last extension was made by oral agreement.
Kyung Dong Civil Engineering & Construction Co., or "KD", is a Korean company engaged in mining, tunnels, infrastructure and engineering.
The Electra-Solel Boneh (“Electra”) Partnership hired KD’s services for mining tunnels in the project of the construction of the Gilboa area power station.
The power station was established with pumped hydroelectric energy storage technology and was designed to produce 300 megawatts of electricity, with the cost of the entire project estimated at 2,000,000,000 ILS.
Maya and Gidi Barber, have signed on 14/12/14 on a document with the headline, "proposal irrevocable purchase”. This document was delivered to Eran Amour, who was the owner of a plot in Kiryat Tivon and was supposed to build a luxury residence on the plot.
GEFEG-NEKAR is a German company that manufactures electric engines (the “German Company”). “Maytronics” is an Israeli company that manufactures swimming pool cleaning robots. On December 21, 2005, the parties entered into a framework agreement for Maytronics to purchase engines from the German Company. Maytronics stopped buying engines from the German Company in 2008. Hence, the German Company lodged a lawsuit for ILS 5,522,200 against Maytronics with the court in Israel.
Shimon is a seasoned business man, with interests in the construction industry. Shimon’s neighbor, Dror, owns a factory that peels and markets vegetables and does business as “Best Produce”. As it so happened, Dror’s business encountered some difficulties, and Dror offered to sell the business to Shimon.