Client updates / Litigation

The Israel Securities Authority recently published a staff position on situations it believes indicate fraudulent securities trading and which justify opening a criminal investigation.

Recently, there has been a dramatic increase in the enforcement of accessibility issues in Israel. More and more companies are facing requests for certification of class action suits for failing to make services accessible to people with disabilities. Such proceedings, exempt from court fees, are initiated by lead plaintiffs against big and small organizations, from both the private and public sectors.

How Israeli companies operating in the U.S. can use COVID-19 as a force majeure and the restructuring of debt in chapter 11 bankruptcy ?

Potential legal exposure when one makes use of a photograph displaying his or her own image without the permission of the photographer.

In December 2019, an expanded panel of seven Supreme Court justices published a precedential and important decision considering the issue of whether a party seeking to file a class action suit against a government agency must send a demand letter to the agency in advance of filing.

In October 2019, the Israel State Attorney published a new guideline on its office’s policy when considering the prosecution of a corporation, as well as on how it should determine its position on the manner of punishing corporations.

The Supreme Court recently ruled on the issue of whether sending a text message in the course of customer service constitutes a violation of the Spam Law.

This ruling constitutes a precedent in the way the court applied the standards of judicial review and held that the business judgment rule should not be applied if business decisions are made by officers while in a state of conflict of interest.

Chapter 8 of the new Insolvency and Economic Rehabilitation Law addresses the liability of officers and functionaries. The law’s main innovation is that – beyond liabilities toward the corporation, which already existed prior to the enactment of the law, such as fiduciary duty and duty of care – special liability will also be imposed on the corporation’s officers and functionaries.

A recently promulgated memorandum of law to amend judicial procedures proposes to add the possibility of filing claims against foreign entities in Israel for damage they caused in Israel as a result of acts or omissions performed outside of Israel.

The Ministry of Justice recently published a new memorandum regarding an amendment to the Companies Law. This amendment seeks to authorize the Registrar of Companies to administratively strike off a company from the Companies Register.

Recently, a four month proxy fight over control of an Israeli incorporated NASDAQ traded company was settled, following a series of proceedings held before the Tel Aviv District Court. At a crucial juncture, the Tel Aviv Court was asked to issue a temporary injunction over a transaction initiated by the board, which included a highly dilutive (24.9%) issuance of shares.

According to a ruling handed down recently by the Israeli Supreme Court, when a real estate asset is sold before the seller enters bankruptcy proceedings, and the seller has not paid the betterment tax, the local council is not obligated to grant the buyer approval for registering the property under his name. Thus, the buyer will be required to pay the betterment tax.

The Israeli Supreme Court has set a precedent by ruling that the Business Judgment Rule should also be applied to a company’s board of directors when it is deciding whether or not to file a derivative suit.

Recently, the Knesset has passed the Law of Insolvency and Economic Rehabilitation – which is aimed at updating the law on insolvency currently in effect in Israel. The Law will take effect in 18 months from now.

At the end of November 2017, the Constitution, Law and Justice Committee of the Knesset approved a revised draft bill to amend the Courts Regulations (Fees), whereby parties filing a motion to certify an action as a class action will be charged a court fee.

A significant precedent was handed down recently by the Israeli Supreme Court, whereby a company’s separate and independent standing must be recognized, even after a motion for a derivative suit has been approved.

New court decision on transfer pricing taxation may shift structuring of M&A transactions from shares to assets.