The association added that its decision to adopt the conclusions of the claims committee should also be covered under the "non-intervention rule", since it was done in an informed manner, in good faith and without a conflict of interest.
- The Association rejected the applicants' claim that the management's decision to adopt the majority opinion in the Claims Committee was not informed. According to the committee, the committee's report was sent in advance to all members of the Association's management, and the minutes of the discussion reflect the discussion that took place at the management meeting. Adv. Meiri was not excluded from the hearing, but rather he was the one who raised the question of his ability to be present at the management meeting at which the report's conclusions were adopted. As for applicant 2, he simply did not attend the hearing for his own reasons.
The association denied the claim that the decision to adopt the conclusions of the committee's report was tainted by a conflict of interest, since it was a lawsuit against an officer. According to her, respondents 2-4 are not officers of the Association, and they ended their positions even before the appointment of the Claims Committee. As for respondent 4, he was never an officer of the Association. In addition, respondent No. 2 was a member of the board at the time of the decision to adopt the Sol outline – against his wrath – which attests to the fact that the Association's management had the best interests of the Association in mind, and not its interest.
The Association also addressed the claim regarding the conflict of interest of the members of its management who decided to adopt the conclusions of the Claims Committee – a conflict of interest stemming from the fear that personal lawsuits would be filed against them. In this context, the Association argued, first, that the decision to adopt the conclusions of the Claims Committee was made in advance, already at the time of its appointment (subject to the existence of exceptional circumstances); Second, the Applicants name the names of 8 members of the Association's management who, according to them, were tainted by a conflict of interest. Therefore, even according to the Applicants, an overwhelming majority of those who voted in favor of adopting the conclusions of the Committee's report were not tainted at all; Third, the significant exposure involved in this lawsuit is to claims against the teams, and not against members of the Association's management; and fourth, it is the Applicants themselves who claim that the consideration regarding the fear of opening additional legal proceedings is irrelevant, and therefore they are prevented and silenced from raising the argument in this context.
- Finally, the Association also denied the claim that the decision to adopt the Sol Report was tainted by a conflict of interest on the part of the management members, due to their fear of respondent No. 2 and the filing of personal lawsuits against them. First, according to her, the decision currently under consideration is the decision to adopt the conclusions of the report of the Independent Claims Committee; Second, and the Claims Committee was established as part of the implementation of the third stage of the outline set out in the Sol Report, and received the court's approval. The significance of accepting the Applicants' argument in this context is therefore that the proceeding – including the work of the Claims Committee – was conducted in vain.
On the merits of the matter, it was argued that the Applicants have no explanation for the fact that despite the alleged concern of the members of the management about respondent 2, the Association's management also made a decision at the meeting in which the Sol Report was adopted regarding the taking of disciplinary measures against Respondent 2 in the Association's institutions. With regard to the claim regarding the fear of filing personal lawsuits against the members of the Association, it was argued that if the members of the management had acted out of such a concern, they would not have voted in favor of the appointment of an external and neutral legal expert to examine the conclusions of the Alkalai Report. In addition, a full examination of Respondent No. 2's statements in the minutes of the Association's management meeting of May 17, 2016 indicates that he did not threaten members of the Association's management by submitting third-party notices against them. In fact, his words in the minutes express a commitment that if a lawsuit is filed against him, he will not add anyone (see p. 12 of the minutes of the meeting of the Association's management of May 17, 2016, which was attached as Appendix 2 to the affidavit of Mr. Rotem Kamar).
Respondent 2's Arguments
- Respondent No. 2 argued that the motion to certify a derivative claim should be rejected because the Applicants acted in bad faith: they "marked" a target regardless of the facts and submitted the application even before the negotiations in the framework of the implementation of the Sol Report had ended; They concealed essential facts and presented the facts in a manner that sinned against reality; And they were partners in the decisions that are the subject of the application – which were made by the management of the association of which they are members – and therefore they bear responsibility for them. It was further argued that the applicants did not attack any of the Association's decisions in the administrative assault proceeding, which is the procedure outlined for this by law.
With regard to the proceeding conducted by the committee, respondent 2 claimed that the committee's work was independent, independent and was done in good faith. According to him, the applicants' position regarding the date of the establishment of the committee and the manner of its work should be rejected. It was further emphasized that the court intervened in the present case in an exceptional manner in the process of appointing the members of the committee, and that the members of the committee were appointed with the consent of the parties. When the committee members were elected, Adv. Meiri agreed that these were professional bodies with expertise. A review of the committee's report shows that it considered all the relevant considerations before formulating its conclusions, and that it held discussions and consultations in order to formulate its findings – including lengthy discussions in which Adv. Meiri presented his positions. In light of the above, the standard of criticism that should be applied to the content of the decision should be lenient.
The Applicants' Response
- The Applicants argued that the manner in which the Respondents presented the sequence of events, according to which the Association acted quickly and decisively, and that the Applicants only delayed its handling of the affair by filing the application for approval, was distorted.
With regard to the arguments regarding the appointment of the committee, its conduct and its conclusions, the applicants rejected the respondents' arguments: with respect to the establishment of the committee, it was argued that the association had no explanation for the explicit statements made in the discussion on the establishment of the committee, according to which the purpose of establishing the committee was to "bury" the affair; With regard to the committee's deliberations, the Applicants rejected the argument that Adv. Meiri should have raised his arguments earlier or submitted an affidavit; With regard to the dependence of the committee members on the Association, it was claimed that the Association did not address the issue of the salaries of the committee members and the inherent fear that stemmed from the interest of the committee members to please the body that appointed them.