Civil Case (Tel Aviv) 9884-06-23 Tal Ohev Zion vs. Ronen Ohev Zion

Judgment

Prior to a claim for remedies for removal of discrimination filed by virtue of section 191 of the Companies Law, 5759-1999 (hereinafter: the Companies Law) filed by the plaintiffs, the minority shareholders in defendants 3-5 against defendants 1-2, the controlling shareholders of defendants 3-5.

The parties to the lawsuit, background and relevant facts

1. The plaintiffs are brothers, the children of Anat Ohev Zion (hereinafter: Anat) and of the late Eli Ohev Zion, who passed away on May 31,2017 (hereinafter: Eli , Deceased).
2. Ronen Ohev Zion (Defendant 1, hereinafter: Ronen) and Yoram Ohev Zion (Defendant 2, hereinafter: Yoram) are the brothers of the late Eli who jointly held a number of family companies with him, including "Ohem Zion Investments Ltd" (Defendant 3, which is held by them in equal shares, hereinafter: Ohev Zion Investments) and "Emperor's Tower (Management and Maintenance) 1996 Ltd" (Defendant 4, hereinafter: the Emperor's Tower). Ohev Zion Holdings is engaged in renting properties in the "Caesar Tower" in the city of Lod, and the Caesar Tower Company is wholly owned by Ohev Zion Investments, which provides it with management and maintenance services.  Ronen serves as a director and manager at Ohev Zion Investments and the Emperor's Tower, and Yoram also serves as a director at Ohev Zion Investments.  In addition, the late Ronen and Eli also held equal shares in the company "Renaissance Import and Marketing of Construction Products Ltd." (defendant 5, hereinafter: Renaissance, a company engaged in the import and sale of marble, sanitary ware and construction products).  All defendants 3-5 will be referred to hereinafter: the companies or defendants, Ronen and Yoram will be hereinafter referred to: the defendants.  To complete the picture, it should be noted that the late Eli, Ronen and Yoram had partnerships in other companies: "RSI Construction Company Ltd.", "Begonia Gardens Ltd.", "Neptune Halls Bat Yam Ltd.", "The Central Parking Lot Ltd.", as well as joint ownership In 5 apartments.  The other companies are not at the center of the lawsuit before me.
3. It should also be noted that during the month of September 2015, an agreement was signed between the late Eli, Yoram, Ronen and the brothers Ohev Zion regarding the loans made by the shareholders to Ohev Zion Investments until December 31,2014 (see No. 180-183 of the plaintiffs' exhibits, hereinafter: the loan agreement). The loan agreement referred, inter alia, to the sums made by each of the brothers, the interest rate, the date and manner of repayment.  Clause 9 of the loan agreement stipulated as follows: "The repayment amounts of the aforementioned owners' loans, as will be repaid from time to time and from time to time by the company to Yoram Ronen and Eli, will be paid in accordance with the ratio between the amounts of Yoram's owners' loan fund and the amounts of Eli's owners' loan fund and the amounts of Ronen's owners' loan fund." In the loan agreement, it was noted that the owner's loan to Yoram is in the sum of ILS 1,406,666 (principal); The owner's loan due to Eli is in the sum of ILS 3,615,616; the owner's loan available to Yoram is in the sum of ILS 116,660.
4. On May 31,2017, Eli passed away. In his will, he instructed that the plaintiffs, who are his children from his second marriage, together with his three children from his first marriage (Eli's children from his previous marriage are not a party to this proceeding and the plaintiffs are not in contact with them - see the statement of claim at paragraph 29), inherit his assets, including his shares in the defendants.  To complete the picture, it should be noted that in the framework of Eli's will, he appointed Ronen as the administrator of his estate, and he also ordered that if the plaintiffs, his wife at the time, Anat, inherited nothing but only 100 shekels (Appendix A to the statement of defense).
5. The Ottoman Settlement [Old Version] 1916Since the death of the late Eli, the parties or one of them have conducted (and are still conducting) additional proceedings against each other in other courts, in matters of the estate of the late Eli and the family companies, including in the Family Court. As part of one of these proceedings, on September 3,2017, CPA Yaniv Buchnik (hereinafter: CPA Buchnik) was appointed as the manager of Eli's estate.
6. 12-34-56-78 Chekhov v. State of Israel, P.D. 51 (2) The process of registering the shares in the name of the plaintiffs in accordance with the provisions of Eli's will was completed on March 14,2022 (i.e., more than four years after his death) and upon completion of the transfer of the shares, CPA Buchnik was released from his position as executor of the estate. Today, the plaintiffs each hold 5.55% of the shares of Ohev Zion Investments and the shares of the Caesar Tower (together 16.65%).  In addition, the plaintiffs each hold 8.33% of Renaissance's share capital (together the plaintiffs hold 25% of Renaissance's share capital).
7. On November 4,2018, during the legal proceedings in the Family Court , CPA Buchnik addressed defendants 1-2 in a letter in which he wrote as follows:

"As part of my duties, various documents relating to the aforementioned companies were forwarded to me, with the assistance of your client.  A review of the accounting cards of the two companies, dated October 25,2018, revealed that significant changes were made to them, in accordance with later instructions by one of your clients.