Caselaw

Derivative Claim (Tel Aviv) 43264-02-17 Appeal Financial Case – Supreme Court Moran Meiri v. Israel Football Association - part 7

October 27, 2020
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Another consideration that was taken into account in the framework of the decision regarding the establishment of a claims committee is the difficulty that derives from the fact that the application in question is a request to certify a derivative claim in the name of an association and not on behalf of a company. This is in view of the doubt that exists regarding the possibility of filing such a request. In this context, it was noted that:

"The current request is a request to file a derivative lawsuit not against a company but against an association. Such a request raises additional questions beyond those that arise when a request is filed to certify a derivative claim against a company [...] Beyond that, and as emerges from the respondents' arguments, there is also doubt as to the very possibility of filing a derivative claim on behalf of an association. This matter must also be taken into account [...] examining the question of whether there is room to approve the establishment of the Claims Committee" (my decision of April 7, 2019, at para. 16).

  1. Beyond all of this, it was clarified that the main concerns regarding the appointment of the committee and the ability of its members to act in a manner that is free from extraneous considerations and while expressing the benefit of the corporation can be reduced by the close supervision of the court both on the composition of the committee and on the manner in which it operates. The fear that the committee will try to satisfy those who sent it can be reduced by the fact that the court will be the one to appoint the members of the committee, who will be aware that this is the body that appointed them and that their decision will be examined by it.

It was further clarified that the aforementioned concern could be further reduced by appointing Applicant 1 himself as one of the members of the Committee, an appointment that ensures that his position will be heard and that he will be entitled to try to convince the other members of the Committee of its rightness (or to be persuaded by the other members of the Committee with respect to certain aspects).

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