Debt Arrangement Firm and Owner Ordered to Pay Former Client NIS 88,000

A Tel Aviv court has ordered a debt arrangement company, Livna Dani Financial Services, and its owner, Dani Livna, to pay a former client NIS 88,390. Judge Adi Hader of the Tel Aviv Magistrate's Court ruled on Sunday that the agreement between the parties was void because the company and Livna provided legal services, which they are prohibited from charging for since a 2017 district court ruling. The client, who had approximately NIS 180,000 in loans and a NIS 650,000 apartment free of a mortgage, approached the company in the summer of 2020. In April 2021, she signed a NIS 330,000 one-year non-bank loan secured by her apartment. After fees, NIS 280,000 entered her account, with about NIS 255,000 transferred to the company to pay creditors and suppliers. By late 2021, she entered individual insolvency proceedings, and the apartment was sold.

The client sued in 2024, seeking NIS 240,000 plus NIS 10,000 for emotional distress, alleging the defendants presented themselves as debt arrangement experts, had her sign unexplained documents, and unnecessarily sent her into a loan and insolvency process despite her ability to repay her debts. The defendants argued the suit was a misuse of legal proceedings, claiming they advised her to sell the apartment and she insisted on the loan. A handwriting expert testified that the client's signatures on agreements and meeting summaries were hers, refuting her claim of forgery. The judge noted inconsistencies in her testimony regarding her ability to read Hebrew, being forced to sign the loan agreement, and the extent of her debts. She also admitted the company paid various parties at her request, contradicting her claim of theft.

The judge found that the company failed in its central duty to safeguard the client's money, specifically regarding a NIS 30,000 fee for a one-year loan extension. Livna claimed he warned the client, but the judge noted a lack of documentation for this warning, contrasting with Livna's usual meticulous record-keeping. The judge also noted that the company's primary service appeared to be shielding the client's money from creditors, as it was held by the company and not her account, thus preventing seizure. Livna did not present evidence of informing creditors about holding the funds, which the judge suggested would have led to immediate seizure.

The court ordered the return of NIS 78,390, representing fees collected by the company and a payment to a lawyer who represented the client in insolvency proceedings, which the defendants failed to prove were properly transferred. An additional NIS 10,000 was awarded for emotional distress. Livna was held personally liable due to his direct involvement in the 2017 ruling. The total payment, including interest, legal fees, and expenses, amounts to NIS 88,390 plus interest from the filing date. This is the second ruling against the defendants in two months, with a previous case in August also finding their financial advisory agreements illegal.