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Civil Case (Tel Aviv) 13203-10-16 Sol.E Investments & Entrepreneurship Group Ltd. v. Landau Reznieli Cafe Chain - part 4

January 7, 2025
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The Rothschild Café Partnership filed a counterclaim, the main of which was a claim for subsistence compensation for loss of profits in the amount of ILS 1,069,191 for a period of 8 years and 8 months [the period remaining until the termination of the franchise agreement] - clause 75b.5 of the counterclaim.

In addition, in section 75 of the counterclaim, additional monetary remedies were claimed:

Regarding the breach of an agreement with a licensee in real estate:

  1. Payment of rent in the amount of ILS 192,100 for the period from June 16 to December 16 - Section 75A(a1) of the counterclaim.
  2. Payment of compensation in the amount of ILS 78,000 for alleged damages caused by Saul to the ceramics, the electrical system and the audio system in the café, upon the evacuation of the café on December 31.16 - Section 75A(a2) of the counterclaim.
  • Payment of a municipal tax debt to the municipality in the amount of ILS 73,150 - section 75a(a3) of the counterclaim.
  1. Payment of a water debt to the water corporation in the amount of ILS 19,865 - section 75a(a3) of the counterclaim.
  2. Payment of a debt to the gas supplier in the amount of ILS 5,163 - section 75a(a3) of the counterclaim.

Regarding the breach of the sale agreement and the concession agreement:

  1. Failure to pay the full consideration in the sale and concession agreement - balance of ILS 569,000 - Section 75B(b1) of the counterclaim.
  • A debt in the amount of ILS 50,000 for the inventory of goods that was in the café at the time of delivery of possession to Sol - section 75b(b2) of the counterclaim.
  • Royalty debt to the partnership in the amount of ILS 86,520 for the months of April 16 - December 16 - Section 75B(b3) of the counterclaim.
  1. Compensation for damage to reputation without specifying an amount - due to complaints by customers, employees and suppliers against Sol regarding the café in Herzliya - Section 75B(b6) of the counterclaim.
  2. Agreed compensation without proof of damage in the amount of ILS 450,000 for failure to submit reports to the Rothschild Café Partnership for the period from April 16 to December 16, according to a calculation of ILS 50,000 per month - section 75b(b7) of the counterclaim.
  3. Compensation for late payments in the amount of ILS 2,481,000 according to the following distribution:
  4. Compensation in the amount of ILS 1,377,000 for delay in payment of royalties of April 16 - Dec. 16 - Section 75B(B8) of the counterclaim.
  5. Compensation in the amount of ILS 519,000, for delay in payment of ILS 50,000 for the café's inventory from August 15 [the date of delivery of possession] to December 16 - Section 75B(B8) of the counterclaim.
  6. Compensation in the amount of ILS 275,000, for delay in payment of the consideration in the amount of ILS 569,000, in accordance with the sale and concession agreements, as of April 16 - Section 75B(B8) of the counterclaim.
  7. Compensation in the amount of ILS 60,000, for non-payment of advertising fees from October 15. It was claimed that Sol never paid for the advertising fees - section 75b(b8) of the counterclaim.

The compensation for the components enumerated in section 11 is calculated according to an agreed compensation of ILS 1,000 for each day of delay - sections 45A and 45B of the concession agreement. 

  1. To complete the picture, we will add:
  • The land of the café in Herzliya on the ground floor was not owned by the Rothschild Café Partnership. The partnership had a lease agreement signed with Tzabar Properties Ltd.  Upon the signing of the concession agreement and the sale agreement, the partnership signed an agreement with Sol [Appendix 19 to the claim], according to which Sol would be an authorizer in the property leased to the partnership.

According to clause 5 of the Bar-Permit Agreement, the Rothschild Café Partnership will continue to pay the monthly rent to the owners, and Sol will pay the Partnership the monthly rent it paid. 

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