Insights & News /  Derivative Actions

The Economic Court's decision to revoke the approval of a derivative lawsuit filed against the controlling shareholder of Equital has sparked controversy among corporate law experts. As a capital market expert, Adv. Micky Barnea was interviewed by Globes on the matter and stated, among other things, that directors on the audit committee examining transactions should be allowed to consult with the controlling shareholder without it being considered as subordinating themselves to his will.

Following the publication of draft regulations on derivative claims, Adv. Eyal Nachshon, a partner in our firm's Litigation Department, was invited to participate in a webinar hosted by the Israeli Association of Publicly Traded Companies. In his lecture, Eyal referred to the draft regulations with an eye toward litigation.

Our firm continues to represent the institutional investors Phoenix and More, shareholders of Megureit Israel Ltd., in connection with a dispute concerning alleged unlawful conduct by Megureit. According to Phoenix and More, the REIT fund unlawfully approved an extension of its agreement with the management company, REIT Index Management Ltd., in a manner that harms Megureit and, consequently, its shareholders. Phoenix and More further allege that Megureit failed to provide documents they requested in connection with the matter and delayed convening a meeting and substantive discussion that could lead to a resolution benefiting the company and all its shareholders. Last week, Adv. Zohar Lande and Adv. Adi Shoham sent Megureit a letter clarifying that Phoenix and More intend to pursue their rights, including by filing a derivative action against the company and other parties. They requested that the letter be treated as a preliminary demand before filing a derivative action.

Phoenix and More, two of three institutional bodies held by Megureit Israel, a residential real estate investment fund listed on the Tel Aviv Stock Exchange, sent the public company a letter demanding it disclose documents as a step before filing a derivative lawsuit. The basis of the letter is the claim that the extension of the agreement with the management company was carried out in a manner inconsistent with the rules of proper corporate governance and the provisions of the law, since approval of the general meeting was never received. Adv. Zohar Lande and Adv. Adi Shoham are representing Phoenix and More in this matter.  

Today, Barnea and ACC Israel hosted a seminar on shareholder activism. Adv. Micky Barnea discussed activism in Israeli companies. Also presenting were Elchanan (Nani) Maoz from Everest Fund and Steve Wolosky from Olshan Frome Wolosky LLP.

An Israeli court has ordered to halt an investment deal in Arcturus Therapeutics, pending clarification of the lawsuit filed by Joseph Payne, the company's founder, regarding the cancellation of his dismissal as CEO. This decision was made despite the fact that the company operates in the United States with US management. Joseph Payne is represented by Adv. Micky Barnea, Adv. Zohar Lande, Adv. Omer Keydar, and Adv. Ron Shuhatovich.

Following the dismissal of Nespresso and Nestlé’s copyright infringement case against Espresso Club, Espresso Club, represented by our firm, appealed the District Court’s costs award, arguing that it was unreasonably low in relation to the costs actually incurred.

Adv. Zohar Lande and Adv. Gilli Cohen-Arazi published an article for Chambers and Partners examining recent trends in Israeli case law that may signal a shift in the courts’ approach to judicial intervention in corporate boards’ business decisions.