As part of the insolvency proceeding, Adv. Amir Palmer, who served as the counsel for Group 102, and Adv. Alon Peles, who served as counsel for the members of the Group 104, were appointed alongside Adv. Erez. These were appointed as the special managers of the fields.
In accordance with the opinion of the appraiser Haussner, on which the office holders relied, it was clear that it was worthwhile to sell the rights in the two lots together (Appendix 16 to the affidavit of plaintiff 3, Mrs. Malkiel). He estimated that the sale of the two lots separately would lead to a consideration of ILS 7.5 million for Lot 102 and ILS 45.2 million for Lot 104. On the other hand, a joint sale will lead to a consideration of ILS 87.4 million. It is therefore clear that this sale would have been preferable to the members of Group 102, even if they would receive 20% of it, than a separate sale of their rights. Accordingly, they were expected to put a higher sum of about ILS 10 million into their pockets.
Group 102 members struggled to get a higher percentage of the sale money. The appraiser Hauschner estimated their share as such that it should be 15% (Exhibit N/9). The group members presented a different appraisal (Exhibit N/8), and at the end of the day their eligibility rate was increased to 20%. Adv. Erez saw this rate as an achievement for the members of the group, since their share in terms of the contribution of the plot area to the project should have been lower (p. 539 Q.30 onwards).
- It follows from this that the cooperation between the lots, which continued at the liquidation stage, benefited the plaintiffs and did not harm them. The group 102 committee knew how to fight to increase the eligibility rate of the group members and succeeded. There is nothing between this and the negligence of the defendants.
Failure by the defendants to explain that according to the agreements there is no practical possibility of replacing Ms. Or as the manager of the buyers' group
- According to the plaintiffs in their summaries, the defendants did not explain to them before signing the agreements, that according to paragraph 8.3.7. According to the sharing agreement, there is no practical possibility of replacing Ms. Or as the manager of the buyers' group, since such a replacement requires the consent of 100% of the group members.
The issue that this argument raises is indeed weighty. But in the circumstances of this case, I am not required to rule on it.
- First, this is not mentioned in the original and amended statement of claim, and therefore it constitutes an expansion of a prohibited front, and this is sufficient to reject the claim.
- On the merits, I accept that such a clause can give rise to very substantial difficulties, especially in the world of purchasing groups. In practice, it can be seen as a complete shackle of the group to the group organizer, since it will almost always not be possible to obtain the absolute majority to terminate the engagement with it. Against this background, it is important to understand the argument of Mr. Geva, the chairman of the group committee, who claimed in his affidavit (at paragraph 34) that this is a "scandalous", "unacceptable" clause, and that "in no company I know has such a majority for decision-making".
Indeed, it is possible to describe circumstances in which the organizer of the group does not promote its interests, and the interests of its members are not properly addressed, and yet they will find themselves in the form of a captive audience of the organizer. This state of affairs is liable to irreparably harm the incentive system that requires the group organizer to deal with its affairs in an ongoing and good manner. If he knew that he could not be replaced, he might not act for the benefit of the group, and even act to promote his personal interest at its expense, and none of its members would be able to do anything, since it would almost always be possible for a member to oppose his replacement.