As a result, the plaintiff petitions to order the liquidation of the company by dividing the company's shares in defendant 2 in kind between the parties, according to their relative share therein. The liquidation remedy is based on a case law according to which the law of partnerships can be used to order the liquidation of a company that constitutes a "kind of partnership" [in this context, the plaintiff refers to the Civil Appeals Authority 5596/00 Stavi v. Nahusi, IsrSC 57(1) 149 (2002)]. Although this is a more extreme remedy, the plaintiff is of the opinion that it should be used in the circumstances of the case.
The defendant's arguments
- The defendant, for his part, denies the plaintiff's claims and asks the court to order the dismissal of the claim, including due to abuse of legal proceedings, lack of cause of action, and lack of good faith on the part of the plaintiff. In addition, the defendant is of the opinion that there is room to dismiss the claim on the merits of the matter in the circumstances at hand. According to the defendant, his conduct does not deprive the plaintiff, and there is no reason to grant the remedies requested by her.
- The defendant claims that this is not a company that is "a kind of partnership". This, according to him, was because it was agreed in advance that the plaintiff would not take part in the management of the company. As part of the agreement, it was agreed that the defendant would be the "sole director of the company" (clause 3.1.2 of the agreement), which, according to him, defined him as solely responsible for the day-to-day management of the company. Moreover, the plaintiff did not ask to participate in the management of the company, and she was aware (and according to him, even agreed) of the risks involved. The plaintiff has no right to appoint a director or to be a partner in the day-to-day management of the company, so the plaintiff's claims regarding the company's relations should not be accepted as a "kind of partnership".
- According to the defendant, his conduct does not constitute discrimination against the plaintiff as a minority shareholder in the company. The main arguments of the defendant regarding the discrimination are summarized as follows:
- With regard to the claim that material information was concealed from the plaintiff prior to the signing of the agreement, the defendant claims that all the material and relevant documents were transferred to the plaintiff during the negotiations between the parties. This includes the company's bank statements; documents in connection with defendant 2 and the relevant legal proceedings; and financial statements from 2018, in which it was noted that there was a debt in the company to a "related party".
With regard to the company's debts prior to the signing of the agreement, the defendant insists that no representation was made that the company was without debts to a third party prior to the plaintiff's entry into the company. Furthermore, it is stated in the Agreement that any representation or undertaking made between the parties without explicit reference therein shall be valid (clause 5.6 of the Agreement). Moreover, the defendant insists that the plaintiff knew about the debt to him and its estimated scope even before the conclusion of the agreement, but chose not to delve into the matter and did not express any reservations.