The applicant may file a derivative claim
- By Section 194(a) of the Companies Law, "Every shareholder and every director in the company... You may file a derivative claim". By Article 198 According to the Companies Law, the court will approve a derivative claim: "If he is convinced that the lawsuit and its management are prima facie for the benefit of the company and that the plaintiff is not acting in bad faith". The applicant meets these conditions, even though he holds only one share in the Delek Group. The Respondent argued that the Applicant delayed a delay that amounts to impediments and testifies to his lack of good faith, since he submitted the application a year and a half after the over-ruling decision. I did not find that this argument should be accepted. The applicant may submit this application even after a year and a half, and it is not clear that he delayed the submission of the application, but that he considered how to submit it. The argument that the applicant is not in good faith due to the filing of additional disclosure requests against other companies with similar claims should also not be accepted, since he is entitled to do so and this fact does not deprive him of the right to file a request for disclosure of documents as a shareholder. As to the claim that the claim is not in favor of the company, I find that this argument should be rejected at this pre-preliminary stage. It is possible that some of the Applicant's arguments will be silenced following an exemption that applies to the directors regarding the breach of the duty of care, but for the purpose of this stage, it has been proven at the initial evidentiary standard that there will be benefit from returning the remuneration to the company's coffers and to establish proper corporate governance procedures in a company that will increase investors' confidence in it and thereby increase its value - This is without setting any rivets as to the application for a derivative claim, if it is filed.
Providing an initial evidentiary foundation
- I found that the applicant provided a preliminary evidentiary basis for the partial acceptance of the request for discovery of the documents:
First, with regard to the condition according to which over-ruling will be done in "special cases", I accept the argument at the initial evidentiary standard required at the stage of the hearing of the request for disclosure, that there is a doubt, even prima facie, that this is indeed a special case. CEO Wells' contribution to Delek Group is evident both in the meeting summons report and in the immediate report, in which he detailed his contribution to a company, especially during the period of the COVID-19 crisis, which directly affected the company's business, operations, and value. The language of the reports indicates that the crisis was also expressed in the company by adding a going concern note to its financial statements, and that the CEO's contribution was in the company's exit from the crisis in which it found itself, and that it helped it to overcome the global crisis of the COVID-19 pandemic (clause 2.3.2 of Appendix 2 to the application and Appendix 4 to the application). However, for the purpose of the overruling decision itself, the immediate report did not specify why a special case exists in order to overcome the objection of the shareholders. The declarant on behalf of the Respondent, Ms. Ruth Dahan-Portnoy (hereinafter: "Dahan-Portnoy") also stated in her interrogation at the evidentiary hearing of May 4, 2025 (hereinafter: "the Evidentiary Hearing") that the objections of the institutional shareholders were examined mainly and that there was no specific reference to the special case for the purpose of overruling (paragraphs 35-37, 41 of the Applicant's summaries). The respondent claimed both in the reply and in Dahan-Portnoy's affidavit that the company's goal was to incentivize the CEO to improve the company's value in the future, but this was not written in the immediate report (and this was also discussed in Dahan-Portnoy's interrogation in the evidentiary hearing, see pp. 439-440 of the transcript). Moreover, the grant is not linked by way of conditioning or in any other way to its future activity and its results. On the contrary, it was emphasized that this is a bonus due to exceptional excellence in the past. There is nothing wrong with this, but this excellence was brought before the meeting, and it did not choose, by a large majority, not to approve the remuneration. There was room to re-examine in light of this whether this was indeed a "special case". Ostensibly, due to the reasons of the immediate report following the Over-Rowling decision and the witness Dahan Portnoy, this was not done.
- In addition, and within the framework of the need for this preliminary proceeding, which deals with the integrity of the over-ruling proceeding (and this without setting any rivets on the matter), it is possible AsThe company's share price fell due to external factors – the same was true of its rise. Although it seems that there is no dispute about the skills of CEO Wells, who succeeded in leading the company to continue operating despite the difficult situation it found itself in during the COVID-19 period (see details in paragraph 10 above), similar effects were had on other companies whose businesses depend on oil prices and everything that comes out of it. These effects were also discussed by Dahan-Portnoy in the evidentiary hearing (the minutes of the evidentiary hearing (hereinafter: "The Minutes"), p. 463, paras. 12-24; p. 464, 1-12):
Q: What was the reason for the recovery in the holding companies?