Civil Case (Center) 38712-06-23 Coover Agencies Ltd. v. Pitkit-Printing Factories Ltd.

Judgment

A claim filed by the plaintiff, Coover Agencies Ltd.  (hereinafter: "the plaintiff"), against the defendants for payment of brokerage fees in the total sum of ILS 3, 371, 018.

After a mediation arrangement was approved between the plaintiff and defendants 1-3, the claim against defendants 4-6 remained only (hereinafter collectively: "The Defendants"), in the sum of ILS 1, 834, 942 (including linkage and interest differences), plus VAT.

Background to the Claim

1. The plaintiff is a company owned by Mr. Yaakov Katz (hereinafter: "Katz") and is engaged in brokerage in the business field.
2. Defendant 1, Pitkit Printing Factories Ltd. (hereinafter: "Pitkit") is engaged in the development of printing technologies.  Defendants 2 and 3 (Gideon Fishman (hereinafter: "Fishman") and Zeev Bleiweiss (hereinafter: "Bleiweiss"), respectively) are directors and shareholders of Pitkit, through companies they own (hereinafter: the "Parties in the Note").
3. Defendant 4, Liberty Sky Ltd. (hereinafter: "Liberty"), was incorporated on September 18, 2022, and on September 23, 2022, purchased the shares of Pitkit from the interested parties in Pitkit.
4. Defendant 5, Meir (Irish) Shahar (hereinafter: "Shahar") is a shareholder, director and CEO of Liberty. Prior to that, he served as a shareholder, director and CEO of the Unima Group Ltd.  (hereinafter: "Unima"), a company controlled by Matan Sahaik (hereinafter: "Matan").
5. Defendant 6, Adv. Yoram Firon (hereinafter: "Firon") is a shareholder and officer of Liberty, and served as a shareholder, director and member of the Unima Investment Committee. According to the plaintiff, Firon also served as a legal advisor to Unima.
6. Towards the end of 2021, Matan initiated the establishment of Unima with the aim of locating and improving healthcare companies.
7. Firon and Katz were partners and business acquaintances, and in this framework, Piron updated Katz about the Unima investor group, with the aim that Katz would help locate possible investments for it.
8. Shlomo Haimi (hereinafter: "Haimi"), a business acquaintance of Katz, had business relations with the interested parties in Pitkit, who were interested in selling Pitkit. Accordingly, Katz and Haimi worked to mediate between Pitkit and Unima to formulate a deal for the sale of Pitkit's shares to Unima.
9. On December 29, 2021, Matan signed a non-disclosure agreement in connection with Pitkit.
10. On January 3, 2022, the plaintiff entered into a brokerage agreement with Matan on his behalf and on behalf of Unima (under construction) (Appendix 4 to the statement of claim), according to which if Unima entered into an agreement for the acquisition of Pitkit and/or its assets and/or control thereof and/or part thereof during a period of 18 months, the plaintiff would be entitled to receive from Unima brokerage fees at the rate of 4% of the total consideration paid (plus VAT) (hereinafter: "Unima Brokerage Agreement").
11. At the same time, the plaintiff entered into a brokerage agreement with defendants 1-3 to find a buyer for Pitkit (Appendix 3 to the statement of claim), in which it was agreed that subject to the execution of the transaction and receipt of the money by the interested parties in Pitkit, the plaintiff would be paid an amount of 2.25% of the consideration received (plus VAT) (hereinafter: the "Pitkit Brokerage Agreement"). The plaintiff and Haimi agreed that the sum received from Pitkit would be divided between them.
12. The Ottoman Settlement [Old Version] 1916After the signing of the brokerage agreements, negotiations began to take place between Pitkit and its stakeholders and Matan and Yunima (under construction).
13. 12-34-56-78 Chekhov v. State of Israel, P.D. 51 (2)On January 23, 2022, a Memorandum of Understanding was signed between Pitkit and the interested parties in Pitkit, and Matan on his behalf and on behalf of Unima (under construction) (Appendix 5 to the statement of claim), which concerns the performance of due diligence in Pitkit, in preparation for a transaction, whereby Unima itself and/or through subsidiaries and/or together with others on its behalf, will acquire 100% of Pitkit's issued and paid up share capital, for an amount to be determined in the detailed agreement (hereinafter: the "First Memorandum of Understanding").
14. On March 29, 2022, Unima was formally incorporated. The shareholders of Unima were Matan (72%), Shahar (3%), M. Firon & Co., Attorneys (9% in trust), and a number of other shareholders.  On April 25, 2022, M.  Firon transferred 3% of Unima's shares to Firon.
15. In light of the progress of the due diligence process, a second memorandum of understanding was signed on April 11, 2022 between Pitkit and the interested parties in Pitkit and Unima (Appendix 9 to the statement of claim), in which the consideration for 100% of Pitkit's shares in the sum of ILS 45 million was determined (hereinafter: the "Second Memorandum of Understanding").
16. About two months after the signing of the second memorandum of understanding, disputes arose between the parties in Pitkit and Unima, and on July 10, 2022, Fishman notified Unima, on behalf of Pitkit, of the cancellation of the second memorandum of understanding, claiming that Unima had fundamentally violated it.
17. After the failure of the negotiations, Shahar began to form a new group of investors to acquire Pitkit.
18. On September 18, 2022, a new company was incorporated: Liberty. 41% of Liberty's shares were held by Shahar's partner, Ms. Shira Tzadik Dollar (hereinafter: "Shira Dollar"); 10% were held by Shahar; 3% of the shares were held by Firon; 16% of the shares were held by Shahar in trust, and the rest of the shares were held by other shareholders.
19. On September 23, 2022, about 5 days after its establishment, Liberty purchased the shares from the interested parties in Pitkit. The amount of consideration set out in the purchase agreement is ILS 45 million.
20. In the statement of claim, the plaintiff claimed that she connected Pitkit and its stakeholders to Unima, and since Shahar and Piron served as shareholders and directors of Unima, and even serve as interested parties in Liberty, and made use of the information received in the framework of the negotiations between Unima and Pitkit, she is entitled to receive brokerage fees from both Pitkit and its stakeholders, at a rate of 2.25% of the amount of consideration received for the sale of Pitkit shares to Liberty. and from the defendants at the rate of 4% of the amount of the consideration, as aforesaid.
21. The defendants refused to pay the plaintiff her salary, inter alia, on the grounds that it was a different transaction. Therefore, the claim before me was filed.
22. Quoted from NevoIn a hearing held on March 19, 2024, the parties agreed to refer the dispute to a mediator, retired judge Yaakov Sheinman.
23. On December 6, 2024, the plaintiff updated that the mediation process between her and defendants 1-3 had been successful, and at the same time, she filed a motion to dismiss the claim against defendants 1-3, without an order for costs. This request was approved on December 8, 2024.
24. When the mediation process between the plaintiff and defendants 4-6 was unsuccessful, the proceeding continued as usual between these parties, during which three evidentiary hearings were held, in which the witnesses of the parties testified and were cross-examined.

The parties' arguments