Civil Case (Tel Aviv) 9884-06-23 Tal Ohev Zion vs. Ronen Ohev Zion - part 2

According to these provisions, unlawful changes were made to the owners' contract cards in these companies. 

8. In accordance with the documents received for my review, it can be seen that transfers were made in exceptional amounts from the contract cards of Eli Ohev Zion, in favor of the contracts cards of his brothers, H.H. Yoram and Ronen Ohev Zion. The aforementioned transfers created a reduction in the balance of the credit due to the deceased by millions of shekels, for the benefit of the other shareholders.  I hereby inform you, by virtue of my position and the duty imposed on me, that there is an impediment to the execution of a disposition in the company and/or its registrations and/or any other asset, which is common to the estate and your client, without obtaining prior written approval to do so." (Hereinafter: Buchnik's letter, See Appendix 4 to the statement of claim)
   A few months after the completion of the share registration (And the end of Rowe's role"H.  Buchnik as the executor of the estate) The defendants and the accountants on their behalf to the plaintiffs for the purpose of setting dates for the existence of Shareholders' Meetings, for the purpose of approving the defendants' financial statements.  In response, the plaintiffs approached the defendants with requests For accounting information and documents Before signing the reports, For the purpose of examining the conduct of the companies (e.g. Financial Statements, Balance Sheets, and Minutes).  The plaintiffs further stated that they would not approve the reports until they received all the information and data they requested.  Thus, in effect, a long round of correspondence developed in which the plaintiffs petitioned for information and additional clarifications, while the defendants responded to them with a partial response (according to the plaintiffs) or by referring them to the executor of the estate and the accountants of the companies.
9. Upon receipt of the defendants' draft financial statements, the plaintiffs raised objections and suspicions of violation of their rights in letters on their behalf. Among other things, the plaintiffs pointed to alleged deficiencies that arose from the reports, such as retroactive withdrawal of salaries in favor of Yoram and Ronen, fictitious payments to associates and family members, an unusual increase in the shareholders' credit balances, and the use of the companies' coffers for personal needs.  Subsequently, and thus it appears from the many correspondence attached to the statement of claim, the exchange of letters between the parties reached a dead end when the accountants and managers did not provide explanations that satisfied the plaintiffs, and made do with suggestions for oral meetings or a demand to clarify the questions.  In this regard, see, for example, a letter in response to the plaintiffs' questions, on behalf of the CPA of the companies Ohev Zion Investments and the Caesar's Tower (hereinafter: CPA Kornfeld) dated May 15,2023:

"I would like to receive clarifications on all the questions, they are not clear (sic .) I think that one meeting should be held with all the shareholders and their representatives in order to understand and make decisions regarding the management of the companies, the accounting reports and the balance sheets, the bookkeeping is located and managed in the Emperor's Towers - the bookkeeper will know how to give the best answers" (Appendix 25 to the statement of claim).

10. The plaintiffs also contacted the defendants' accountants, including CPA Kornfeld, as aforesaid, and drew their attention to their professional responsibility as auditing accountants and asked them to take action to correct the deficiencies they pointed out (Appendix 26 to the statement of claim).
11. Parallel to the parties' conduct regarding the information requested, on February 19,2023, Ronen sent a letter to "all shareholders" in which he announced the granting of an option to sell his rights in Ohav Zion Investments and other companies owned by the parties (Bat Yam Central Parking Company and Bat Yam Neptune Halls Company), in exchange for receiving his proportional share of the total consideration offered by Maoz Daniel Ltd. in the total amount of ILS 40 million (Appendix 31 to the statement of claim, hereinafter: the Option).  On February 22,2023, it was clarified to the plaintiffs, in response to their inquiries regarding the option, that the sum of the "Maoz Daniel" company's offer consists of a total of ILS 23,000,000 for the purchase of the Neptune Halls Company and a sum of ILS 17,000,000 for the purchase of the central parking lot.  On February 27,2023, the plaintiffs sent a response to Attorney General Ronen, in which they announced that they were exercising the option offered with regard to Loves Zion Investments.  According to the plaintiffs, Ronen ignored their announcement of the exercise of the option and refused to sign the share transfer deeds, which only deepened the severe crisis of trust between the parties.

The proceeding before me

12. On June 5,2023, the plaintiffs filed their original claim, in which they requested "interim" relief for the appointment of an investigative accountant in order to "confirm the plaintiffs' concern of extreme and ongoing discrimination on the part of defendants 1-2 in the companies" (the original statement of claim in paragraph 1). According to the plaintiffs, the discrimination was expressed, inter alia, through the issuance of funds in violation of the law, false registration in corporate documents, and while ignoring the plaintiffs' right to exercise such an option.  The plaintiffs noted that after an investigator is appointed, their right to petition for relief of separation by virtue of section 191 of the Companies Law is preserved.
13. In the pre-trial hearing that took place on March 4,2024, and following difficulties raised by the court in leaving the original claim intact, the parties agreed to contact, first, to the defendants' accountants together with an accountant on behalf of the plaintiffs, in order to obtain clarifications and documents from the defendants. It was further agreed that after this request, the plaintiffs would decide whether to seek mediation or amendment of the claim, by way of a petition by virtue of section 191 of the Companies Law.
14. On April 16,2024, the plaintiffs held two meetings with the defendants' accountants, one with CPA Kornfeld at the firm of a company owned by Yoram, and the other with the firm of a Renaissance accountant, CPA Gabriel El Natan (hereinafter: CPA El Nathan). Ronen, counsel for the plaintiffs, and Prof.  Hadas Glander, the expert on their behalf (hereinafter: Prof.  Glander or the expert), were also present at these meetings.  On June 4,2024, the plaintiffs announced their desire to continue the investigation of the proceeding, and on July 21,2024, I granted their request to amend the statement of claim in order to charge them for the defendants' expenses.
15. On August 4,2024, the amended statement of claim was filed, in which the plaintiffs claimed that they had been deprived by the defendants, by taking advantage of their status and position in the companies; that the defendants pocketed unusual sums of millions of shekels from the companies' coffers and made changes in the companies' accounting books in violation of the law. The plaintiffs added that although prior to Eli's death, the companies had made handsome profits, after his death, the plaintiffs did not receive any funds.  For the reasons detailed in the statement of claim, the court was asked to issue an order ordering the execution of a separation between the plaintiffs and the defendants in relation to their holdings in the companies by way of forced purchase of the plaintiffs' shares, or alternatively, to provide any remedy in order to remove the discrimination.  The plaintiffs also requested that the court instruct the defendants to exercise the option given to the plaintiffs by Ronen to purchase his shares in Ohev Zion Brothers Investments.  To their claim, the plaintiffs attached an expert opinion (hereinafter: "the first glander opinion", Appendix 30 to the statement of claim), in which she analyzed the audited financial statements and the accounting-economic records received from the defendants up to that date and sought to rely on her conclusions in order to prove the alleged discrimination.
16. Even after the filing of the amended statement of claim (and after the meetings that took place on the court's order, see paragraph 14 above), the plaintiffs demanded to receive additional documents from the defendants. On March 3,2025, another pre-trial was held, in which a decision was issued instructing the defendants to hand over some of the documents requested by the plaintiffs.  This decision led to another request regarding the documents submitted by the plaintiffs, and on May 14,2025, I held as follows: "The defendants choose to transfer documents bit by bit, and their conduct indicates that documents are located, even though it is claimed that they do not exist, nor do they meet the deadlines, on the other hand, the plaintiffs raise new demands that deviate from the framework of my decision (of March 3,2024)."
17. After the proceedings regarding the documents had been exhausted, affidavits of the main witness were submitted on behalf of the parties. The plaintiffs submitted the affidavit of plaintiff 1 (hereinafter: Tal), as well as a supplementary opinion by the expert (hereinafter: "the second glander opinion").  The defendants, for their part, submitted an affidavit of the main witness on behalf of Ronen, and that was only.  On November 6,2025, a summary pre-trial hearing was held, and as part of my decision there, I stated, inter alia, the following: "I will note that an expert opinion was submitted on behalf of the plaintiffs, and it raises, inter alia, questions regarding expenses.  The defendants chose not to submit an opinion on their behalf.  And in the absence of two contradictory opinions, I did not find the place, at this stage, to appoint an expert on behalf of the court."
18. On February 10,2026, an evidentiary hearing (recorded) was held, during which Tal, the expert, and Ronen were interrogated. On May 17,2026, the plaintiffs' summaries were submitted.  At the end of the hearing, the court sought to clarify (again) whether it was possible to formulate a comprehensive solution to the dispute, but since this did not go well, the parties' summaries were submitted and I have no choice but to appeal to a decision, first to gather the parties' arguments, in the pleadings and their summaries.

The plaintiffs' arguments

19. According to the plaintiffs, the defendants Ronen and Yoram excluded them from information relating to the companies' business activities and even systematically refused their demands to transfer basic information and documents regarding their management, such as financial statements and balance sheets. This refusal did not prevent the defendants from demanding that the plaintiffs appear at shareholders' meetings or even approve the companies' financial statements.  According to the plaintiffs, the denial of this information severely violated their rights in the companies and their ability to supervise the conduct of the companies.
20. The plaintiffs claimed that the defendants had made false registrations and unlawful changes in the companies' books. In order to prove their claim, the plaintiffs sought to rely on Buchnik's letter, and claimed that Buchnik, who they claimed was appointed as a neutral and objective party by the court, confirmed that the defendants had made transfers in amounts exceeding Eli's bill cards in favor of Ronen and Yoram's bill cards, which "created a reduction in the balance of the rights due to the deceased by millions of shekels" in favor of Ronen and Yoram.
21. It was further alleged that the defendants carried out actions of diverting profits from the companies, converting receipts, withdrawing prohibited funds, and paying excessive salaries to associates - which emptied the companies' coffers. To prove these claims, the plaintiffs sought to rely on the draft financial statements of Ohev Zion Investments.  According to them, these reports show that improper financial activities were carried out in the companies for the benefit of some of the shareholders, such as loans that were noted without explanation, an increase in the salaries of officers, non-disclosure of the identity of the employees who benefited from the salaries, and a significant increase in interest expenses for related parties.  With regard to the Caesar's Tower reports, it was claimed that they did not mention a loan from a lover of Zion Investments, even though this loan appears in Note 8 to the draft financial statements of Ohev Zion Investments; It was claimed that the Caesar's Tower report did not explain why liabilities to the managers appear without an explanation of the debt, let alone that this debt increased by more than half a million ILS in 2021, the plaintiffs added that they were not given An explanation of the high amounts noted in the Salaries and Ancillary section, as well as the doubling of financing expenses for related parties, without elaborating on these parties.
22. The plaintiffs claimed that the defendants repaid loans made available by companies owned by Yoram in the sum of "more than ILS 2.3 million", with their personal preference over the minority. According to them, this repayment was made without a symmetrical repayment of the owner's loan made by the late Eli in the sum of "approximately ILS 2.2 million", and in contravention of the pro-rata mechanism set forth in the loan agreement, which was quoted in paragraph 3 above (see also paragraphs 84-85 of the statement of claim, in the first Glander opinion at p. 14).
23. The plaintiffs added that the financial statements of Ohev Zion Investments show that the defendants withdrew management fees and double wage expenses without a lawful explanation and approval. Thus, for example, "management fees to the parent company" were paid in the amounts of "ILS 240-520" from the Emperor's Tower, while at the same time, high salary costs were attributed to the two companies (the mother and daughter), which together constitute a systematic emptying of their profits.  They further claimed that as of 2017, the year of Eli's death, a new section called "Rent and Maintenance Expenses" was added in the financial statements of Lov Zion Investments.  In respect of this item, expenses in the amount of approximately ILS 1,450,000 were recorded between the years 2017-2022 without an explanation of the need for it.
24. The plaintiffs added in their summaries that from the second opinion of Glinder, it appears that as of 2019 there was a decline in the average operating profit, while until 2019 the operating profit was an average of about ILS 647,000, while since 2019 it has fallen to an average total of about ILS 200,000. In this regard, the plaintiffs attacked Ronen's new and suppressed version, which was given for the first time during his interrogation, according to which the decrease was due to two large expenses (chillers on the roof in the amount of "ILS 600,000-700,000" and sprinklers at almost ILS 500,000), and claimed that this was a false claim since Ronen confirmed that this expense was made in 2018, the year in which the highest operating profit (for the years 2013-2023) of ILS 774,000 was recorded.  The plaintiffs also argued that Ronen's version that the decline in operating profit was caused by the coronavirus pandemic or the war should not be accepted, and argued that the war occurred in any case in the last quarter of 2023.  They claim that this decline indicates an unequal distribution of resources that amounts to discrimination against the plaintiffs.
25. It was further added to this matter that the ("artificial", so they claim) increase in the "management and general" expenses of the Loving Zion Investments brothers also indicates an unequal distribution of the company's resources - according to them, since 2019 there has been an average increase of ILS 470,000 in these expenses, with regard to which the plaintiffs added When Ronen was verified with this section, he denied the data and later did not even know how to provide an explanation for this increase.
26. Further to their claims in the statement of claim regarding the registration of a new artificial expense of "rent and maintenance" , the plaintiffs emphasized Ronen's various versions regarding this expense, and his admission that the sum of ILS 600,000 in 2019 was actually paid as management fees "to a related company" and not as rent. In this regard, the plaintiffs further claimed that in the 2020 reports, an additional retroactive amendment was made to the "Rent and Maintenance" section, in which an order in the amount of ILS 300,000 was added in respect of management fee expenses, and without the defendants providing any accounting explanation for this.
27. As for the defendants' claims that as of 2021, salary expenses in the companies increased (over ILS 300,000), the plaintiffs claimed that the defendants did not prove their claims that the increase was due to retroactive salary withdrawals, and that it was not even proven how these withdrawals were calculated, all the more so when it turned out that Ronen's version that Eli's eldest son received a salary from the Ohev Zion brothers turned out to be incorrect. In addition, the plaintiffs pointed to a 25-fold jump in the suppliers' balance in 2022-2023 and claimed that Ronen's explanations in his interrogation about this issue were false.
28. With regard to the owners' loans, the plaintiffs refuted in their summaries the defendants' claim that they had corrected the deficiencies detailed in the Buchnik letter, and claimed that not only were these deficiencies not corrected, but that additional retroactive changes were made, which further reduced the balance of Eli's owners' loans. The plaintiffs added that during the course of the proceeding, they exposed a two-stage fraudulent act carried out by the defendants for the purpose of erasing a long-term loan provided by Ohev Zion Investments to the Emperor's Tower (a total of ILS 1.7 million) - first, they deleted from the financial statements of Ohev Zion Investments the loans that were made available in favor of the Emperor's Tower - even though it was not repaid, and afterwards, in the financial statements of the Emperor's Tower, they changed the loan retroactively so that instead of it being recorded as a debt to Ohev Zion Investments - It was recorded as a debt to Yoram and Ronen only (the managers), while increasing the balance of the loan.  In this regard, the plaintiffs claimed that this move in fact deprived Eli's heirs of their share in the loan in the amount of approximately ILS 900,000 and transferred the debt to the benefit of the defendants only, which Ronen confirmed in his interrogation with the words: "His face looks like this, yes." The plaintiffs added that Ronen admitted that they had made additional retroactive amendments to the loans of the late Eli's owners, claiming that he had withdrawn funds from other companies, contrary to the 2015 agreement in which Ronen first recounted during his interrogation.
29. The plaintiffs added that the analysis of Renaissance's reports also raised serious concerns about improper conduct, for example, it was claimed that the scope of Renaissance's expenses was relatively large compared to the company's turnover; that the gross profit calculated in these reports was significantly lower than what is customary in the industry, and from this the concern stems that some of Renaissance's inventory has "disappeared". They also added that they were not provided with information about Renaissance's investment in Mandarin - even though Mandarin is Renaissance's main asset.  The plaintiffs claimed that they did not receive explanations as to why there was an increase in Renaissance's debt to Ronen during 2021 and that they did not receive an explanation regarding the increase in shareholders' balances during the years 2017-2021.  The plaintiffs also pointed to an unexplained increase in salary and related expenses in 2021 of about 17%, which, they claimed, was one of the reasons for Renaissance's losses for 2021.  In addition, the plaintiffs claimed that the Renaissance reports did not provide an explanation regarding expenses for lawyers and payments such as salaries that were paid to family members such as his son, Gal Ohev Zion, and his son-in-law, Assaf Shuker, who do not work for the company at all.  These actions, according to the plaintiffs, raise concerns about the execution of transactions by interested parties and the fictitious employment of members of Ronen's family at the expense of the company's coffers.
30. The plaintiffs argued that the defendants' defense had collapsed, since not only did the defendants not submit a counter-opinion to the opinion submitted by Glender, but their defense relied solely on the sole and unreliable testimony of Ronen, while they even refrained from summoning Yoram, the companies' accountants or the estate manager to testify, which they claimed establishes a negative evidentiary presumption for their obligation. In this regard, the plaintiffs also complained about the unusual intervention of the defendants' attorney in Ronen's interrogation, as reflected in the transcript of the hearing.
31. The plaintiffs reiterated their claims regarding an ongoing crisis of trust, and sought to rely on Tal's testimony, which described that the plaintiffs were living in "fear" due to Yoram's threats that he would "take revenge on us and make our lives miserable." As for the parties' dispute regarding the option, the plaintiffs further claimed that Ronen's testimony on this matter was hesitant, in which he raised a new claim that his intention was to sell only the rights of Ohev Zion Investments in Neptune.
32. The plaintiffs added that Ronen in bad faith ignored the plaintiffs' right to exercise the option given to them to purchase the shares of the Ohev Zion Brothers Company. According to them, Ronen behaved in bad faith and ignored their notice and continued to treat Ohev Zion Investments as his own.  The plaintiffs argued that Ronen's disavowal of this offer, which was lawfully accepted by the plaintiffs while fully complying with certain requirements and with discretion, violates their right as minority shareholders; perpetuates his unilateral control of the company and constitutes discriminatory behavior that prevents the plaintiffs from increasing their holdings as determined in the articles of association of the Ohev Zion Brothers Company.
33. The plaintiffs claimed that there was a severe crisis of trust between the parties that did not allow for the continuation of joint work, and which was also reflected in other interfaces that went beyond partnership in the companies: in this context, the plaintiffs claimed that Ronen forged a demand for payment of a municipal tax debt that was allegedly sent by him on behalf of the Savyon Local Council; that Yoram had made harsh accusations against their late father, Eli, in the framework of a lawsuit he filed against Ohev Zion Investments (Family file 55656-12-21), hereinafter: Yoram's claim) and even added that in the framework of another lawsuit that was conducted between the parties (family file 16590-09-17) which related to the purchase of an estate owned by the late Eli, events occurred of cancellation of a win by Yoram (after he offered ILS 18 million), the submission of contradictory requests by him and Ronen for an additional bidding on the grounds of the existence of a "new bidder" in the amount of ILS 22 million. and Yoram's attempt to purchase the estate himself (conduct which, according to the plaintiffs, was even severely criticized by the estate manager).  According to the plaintiffs, even if discrimination is not proven, the court may order the separation of the parties in the companies, in view of the aforementioned loss of trust.
34. The plaintiffs argued that while the alleged discrimination was proven, all the parameters set forth in the case law for the purpose of granting a remedy of forced purchase were met: these are a few companies in which the controlling shareholders are directly involved in management; there are family ties between them, and in which there is a complete practical limitation on the share offenses. They claim that while in a "typical" few companies the shareholders are involved in the management, in this case the plaintiffs are completely at the mercy of the defendants without any ability to supervise the activities of the companies, and at a time when there is a deep and irreconcilable crisis of trust between the parties.
35. The plaintiffs rejected the defendants' argument that a decision on the issue of the owners' loans should be avoided due to the proceedings being conducted in the Family Court, and noted that it was the defendants who chose not to request a stay of proceedings.
    In any event, they argued that there is no overlap between the proceedings since the current proceeding deals with retroactive changes made by the defendants themselves after Eli's death VII"30, while the family proceeding deals with Eli's alleged actions during his lifetime, and that to the extent that changes were made to the bill cards unilaterally, the court must order the restoration of the situation as it was before Eli's death.

The defendants' arguments

36. In their statement of defense, the defendants raised a preliminary argument that the substantive authority to hear the claim rests with the Family Court, and also added that in the framework of Yoram's lawsuit (which was filed against the companies, the plaintiffs in this case and other defendants), he argued that owners' loans that he had made for the companies that were illegally registered in favor of the late Eli should be returned to him. According to the defendants, in the aforementioned proceeding, the same arguments that were raised in the lawsuit before me were already raised, such as the claims of discrimination, the demand for the provision of accounts, the application of partnership laws to the family companies, and more.  According to the defendants, the Family Court had already ruled on the question of jurisdiction on December 11,2022, and ruled that the substantive jurisdiction was vested in it and that the family companies should be joined as a party to the same proceeding.  In this regard, the defendants further argued that in the amended statement of defense filed by the plaintiffs here in Yoram's lawsuit, they clarified that they would not repeat the claims raised in the lawsuit before me - but they did not keep their word.
37. On the merits of the lawsuit, the defendants rebuffed the plaintiffs' claims regarding compartmentalization and refusal to provide accounting information - and claimed that the companies are managed with full transparency and professionalism. In this regard, the defendants emphasized that CPA Buchnik confirmed that the defendants cooperated fully with him on their part and that he (Buchnik) himself provided the plaintiffs with all the documents they demanded at the meeting held on September 28,2022.  The defendants further claimed that Buchnik even confirmed that during his tenure as executor of the estate, the defendants provided him with all the materials required for the purpose of conducting an ongoing audit of the companies.  The defendants sought to rely on the letters of CPA Kornfeld and CPA Elnatan (CPA Renaissance), in which they confirmed that the defendants had instructed them to transfer any material required of the plaintiffs to the plaintiffs.
38. The defendants rejected the plaintiffs' claims regarding false registration in the companies' books and claimed that these were claims that were made without any support. With regard to Buchnik's letter, the defendants claimed that his claims were made in relation to a change in the registration of the owners' loan balances only in a manner that reduced the balance of the late Eli vis-à-vis his brother - and that this letter did not say anything about taking money, it was further claimed that this letter also dealt with RSI Construction Ltd., which was not attached to the claim here.
39. The defendants also rejected the plaintiffs' claims of money smuggling, diversion of profits and improper wage withdrawals. According to them, the opinion of Glander is based on baseless speculation and fears only, and does not present any evidence of discrimination or prohibited acts in the companies.  With regard to the plaintiffs' claim regarding the denial of profits from the plaintiffs, the defendants claimed that Yoram and Ronen actually manage Ohev Zion Investments and the Caesar Tower, and receive a proper and agreed-upon salary in the sum of ILS 10,000 per month each for this work.  According to them, profits were not distributed in these companies, and most of them are not profitable (such as the Renaissance company).  The defendants also rejected the claims regarding the employment of family members in the Renaissance company, claiming that these were "despicable accusations that amount to suspicions of criminal" In addition, it was claimed that CPA Kunfeld asked to hold a working meeting with the shareholders in order to discuss the plaintiffs' claims, but the plaintiffs were the ones who refused to do so and sent the defendants letters of threat.
40. With regard to the plaintiffs' claim regarding the exercise of the option, the defendants replied that this was a false claim that constituted an attempt at oppression and theft on the part of the plaintiffs. According to them, Ronen never offered for sale his shares in Ohev Zion Brothers, but rather sought to sell all of his holdings in the companies "Neptune Halls Ltd." and "Bat Yam Central Parking Lot Ltd." on the basis of a purchase offer from Maoz Daniel in the amount of ILS 40 million.  The defendants claimed that the plaintiffs' attempt to announce the exercise of an option to purchase Ronen shares in Ohev Zion Brothers for "ILS 0" or for their face value of "ILS 100" was done cunningly and in bad faith.  The defendants further claimed that in any event, the option was not exercised at all and the "Maoz Daniel" company withdrew its purchase offer.
41. In their summaries, the defendants sought to rely on a letter from Attorney Canaan dated February 22,2023, in which the distribution of the offer in respect of the option amounted to ILS 23 million for Neptune and ILS 17 million for the central parking lot. The defendants added that in Tal's cross-examination, she evaded explaining the contradiction in the ILS zero share demand on the grounds that she was not legal.  Finally, the defendants argued that the notice of exercise of the option on behalf of the plaintiffs did not meet the exercise requirements and should be rejected for this reason as well.
42. With regard to the claim that the repayment of the owners' loans at Ohev Zion Investments was made in an asymmetrical manner, the defendants claimed that only a partial repayment was made to Yoram, due to the fact that he had the largest owners' loan. They also claimed that the dispute regarding the registration of the owners' loans of the late Eli from 2018 was discussed and is being clarified in any case in the framework of Yoram's claim in the Family Court.  The defendants added that the claim of false registration and transfer of funds is completely false, and that the plaintiffs refrained from filing a request for a derivative claim for the return of funds, which attests to the non-existence of their claims.
43. The defendants repelled the claim of the aforementioned crisis and claimed that the lawsuit was in fact an attempt to force the dissolution of partnership on the defendants under the guise of a discrimination claim. According to their version, the source of the struggle is the tireless desire of the plaintiffs' mother, Anat, to take control of the assets of the estate of the late Eli, including the land that was registered in the name of the siblings' parents, since the late Eli bequeathed to her in his will only the sum of ILS 100.  In this context, the defendants noted that claims for usage fees against Anat are being clarified in the Magistrate's Court in Netanya, and that the sale of the estate to a third party has already been approved recently, so that the plaintiffs' presentation of the matter is partial and distorted.
44. It was further argued that all of the plaintiffs' claims regarding the failure to fully record the income or withdrawals of funds in the Renaissance reports are also baseless claims that were claimed without any basis and that the defendants did not forge the document demanding payment for the estate, the defendants attached to their defense (Appendix 19) a demand for payment of property taxes to the estate of the heirs of Dalia Ohev Zion - the defendants' mother and me.
45. In their summaries, the defendants claimed that the expert admitted in her cross-examination that she did not challenge the reliability of the defendants' financial statements, and from this it can be learned that the defendants' conduct in the companies was impeccable and that the plaintiffs were the ones who presented a distorted picture of reality, even though the defendants provided the plaintiffs with all the documents that were requested of them. They further added that although it was determined that with regard to the owners' loan and the rights of the shareholders in the joint companies, Yoram's lawsuit would be decided in the Family Court (which is still ongoing), the plaintiffs did not hesitate to paint a fragmented picture according to which changes were made in the owners' loan of the late Eli, as well as a picture of a decrease in cash, despite the fact that the financial statements show that Yoram is the holder of the largest owners' loan, for which a partial repayment of ILS 1.9 million has been made.  In this regard, the defendants sought to rely on the testimony of the expert, who confirmed in her cross-examination that the owner's loan of the late Eli was always about ILS 2 million over the years.
46. With regard to the plaintiffs' claims regarding the salary paid to the defendants, the defendants added that the management fees for the years 2017,2018 and mid-2019 were paid by Ohev Zion Investments in the sum of ILS 600,000 (ILS 300,000 each) retroactively in 2019 against a tax invoice, and were classified in a profit and loss statement under the "rent and maintenance" component. It was claimed that in 2020, the company was charged the sum of ILS 300,000 (ILS 150,000 each) for management expenses under the same component, an amount that has not yet been actually withdrawn by the defendants.  The defendants emphasized that as of 2021, their salaries are paid on a pay slip and appear under the "Salaries and Incidents" component.  In this regard, the defendants argued that the expert confirmed in her testimony that the increase in the salary component was due to the payment of the salary of ILS 10,000 per month, and did not claim that this was an unreasonable salary.
47. With regard to the plaintiffs' claims regarding the decrease in operating profit, the defendants claimed that this profit decreased due to the defendants' salary components, and in any event, the activities of Ohev Zion Investments are affected by market trends and risks (including the coronavirus and the war). It was further claimed that in his re-examination, Ronen confirmed that he and Yoram did not take a single shekel from the Caesar Tower from 2017 onwards, and that in the case of the "Renaissance" company, there is an owner's loan and salaries due to Ronen.
48. The defendants continued to deny the plaintiffs' claim of a crisis of trust and claimed that these were not proven at all. In this regard, they added that the plaintiffs were the ones who chose to sever their ties with their stepbrothers and the defendants upon the death of their father, and that in any event, the plaintiffs never took part in the management of the companies.  It was further added that the plaintiffs' claims regarding the broken relationship are puzzling, considering that until the passing of the late Eli, the relationship between them was warm.  The defendants also added that the plaintiffs' claim regarding the forgery of the arnona letter should be dismissed since it was proven that such a demand was indeed sent by the council (and that, in any event, according to them, the plaintiffs did not summon the head of the council for questioning).  The defendants added that Tal's claims of threats against her by the defendants were made only at the evidentiary hearing and were not previously brought in the affidavit.
49. The defendants claimed that the plaintiffs were the ones who consciously chose not to summon the accountant who prepared the reports to testify and not to present the working papers in their possession, which indicates the absence of a real finding against the proper management of the companies. In addition, the defendants argued that all the accounting records, such as the classification of the loan to the "Caesar Tower", were made lawfully and that in the absence of an investigation by the reporter, the audited financial statements should be accepted as reflecting a complete and reliable picture.
50. With regard to the plaintiffs' claims regarding the non-distribution of dividends, the plaintiffs argued that apart from a reasonable management fee and the repayment of an owner's loan, they did not withdraw funds from the company, and that since the death of the late Eli in 2017, no dividends have been distributed in the companies, and therefore it has not been proven that any expectation was violated by the plaintiffs. The defendants also argued that the plaintiffs' refusal to join all the shareholders and all the joint companies in the lawsuit shows that this is not a genuine desire for a final separation, but rather an attempt to continue litigation.
51. In summary, the defendants argued that no discrimination or even the existence of a "partnership spring" had been proven, since the plaintiffs had never worked for the companies or sought to take part in their management, and in any event, the relationship between the parties was not characterized by a personal relationship with the shareholders, which involved mutual trust. The defendants referred in this matter to Civil Appeal 94/20 Tuvia Luskin v. Giv'ot Olam Oil Ltd., published in Nevo, given on August 18,2022 (hereinafter: the Luskin case).  They also argued that the companies are not at an impasse and referred to Civil Appeal 6290/17 Gabriel Magenzi v. Yoav Levy, published in Nevo, given on February 11,2018 (hereinafter: the Magenzi case).  Therefore, the defendants argued that there was no cause of action justifying the granting of relief of separation, all the more so when it was not proven that the company's activity was tainted by bad faith or fraud or that unilateral withdrawals of funds were made by the majority shareholders.  The defendants added that the severance in the relationship between the parties stemmed from the plaintiffs' free will following their objection to the eviction of their mother, Anat, from the estate in Savyon, which was eventually sold to a third party, and that the demand to force the purchase of the shares was improper, although the plaintiffs are entitled to act to sell their shares by selling them to a third party.

Discussion, and the beginning of the decision in summary

52. After reviewing the pleadings; the affidavits; the expert opinion; I heard the parties' testimonies and was impressed by the witnesses, I determine that the claim should be accepted, in part. I am of the opinion that the plaintiffs have lifted the burden imposed on them in the circumstances of the case and have proven that the defendants are managing Ohev Zion Investments and the Emperor's Tower in a manner that deprives them of their rights.  This discrimination is expressed in the burden of expenses on the companies since the death of the late Eli, when the explanations given for this increase are contradictory, confused and do not correspond to what is recorded in the financial statements; in making retroactive changes regarding the loans in the companies, in a manner that deprives the plaintiffs; by systematically concealing information and documents in a manner that harms the legitimate expectation of the plaintiffs as minority shareholders.
53. I have come to the conclusion that there is a crisis of trust between the parties and that the inequality in the balance of power between the uncles (Ronen and Yoram) and their nephews, the plaintiffs, is acute and bitter. I got the impression that the defendants are trying to divert the fire to Anat, who is not involved in this case at all and has no share in the companies' shares (see, for example, what is stated in paragraphs 13-15 of the defendants' summaries; Tal's interrogation, at p. 32, paras.  21-28; p. 33, paras.  3-21).  Even if the defendants have a "full belly" on Anat (and I do not express an opinion on this matter), this does not affect the decision in this case, and see my words at p. 33, paras.  22-31 of Peru.
54. I am of the opinion that there is no impediment to granting the requested relief in the format that has been highlighted, since there are circumstances that justify a forced purchase, as will be detailed below. However, there is no reason to grant the requested relief in the matter of the Renaissance Company, and there is no reason to order the enforcement of the option.  In order to justify my determinations above, I will first address the required normative framework; the burden of proof and evidentiary presumptions; the factual conclusions that I have reached and the necessary legal conclusions, as a result.

The Normative Framework and First of All the Grounds for Discrimination - The Rule

55. The claim of discrimination of a shareholder in a company is based on the provision of section 191(a) of the Companies Law, which states as follows:

"If a matter of a company's affairs is conducted in a manner that constitutes discrimination against its shareholders, in whole or in part, or there is a material concern that it will be conducted in this way, the court may, at the request of a shareholder, give instructions that it deems necessary for the purpose of removing or preventing the discrimination, including instructions according to which the company's affairs will be conducted in the future, or instructions to the shareholders of the company, according to which they or the company, subject to the provisions of section 301, will purchase shares from its shares."

56. Although the term "deprivation" is not interpreted in the law, the concept that discrimination takes root when the legitimate expectations of the parties have been violated, and even in cases where the violation of a right granted to shareholders in a company in its basic documents has not been proven at all, see Other Municipality Applications 8712/13 Adler v. Livnat, published in Nevo, given on September 1,2015, at para. 66, hereinafter: the Adler case):

"It seems that the principle that 'discrimination will exist whenever there is a violation of the legitimate expectations of the parties, even if the conduct that serves as the basis for a claim does not constitute a violation of a right granted to a shareholder in the company's basic documents' [Cohen, at p. 120.  See also: Irit Habib-Segal, Corporate Law, vol.  1,611-610,635 (2007) (hereinafter: Haviv-Segal); Bahat, at pp.  787-789].

57. It was further held that in determining the "legitimate expectations" of the shareholders, the circumstances of the case, including the nature of the company, must be taken into account (Civil Appeal 2773/04 Natsba Settlement Company Ltd. Atar, published in Nevo, given on December 14,2006, at paragraph 21, Civil Appeal 2718/09 "Gadish" Compensation Funds Ltd.  v. Elsint Ltd., published in Nevo, given on May 28,2012, at paragraph 27, hereinafter: the Gadish case).
58. In the case law, section 191 is interpreted as "a general and flexible norm for the intervention of the court in order to determine a norm of fairness in the commercial field of the management of the company" (Civil Appeal 2699/92 Nissim Bachar v. T.M.M. Aircraft Food Industries, published in Nevo, June 2,1996, at paragraph 8, hereinafter: the Bachar case). It was also determined that the boundaries of the norm may change according to the circumstances of the case at hand (Tzipora Cohen, Shareholders in the Company - Claim Rights and Remedies - Volume 2,93, Second Edition, 2008, hereinafter: Tzipora Cohen).

See also in the Bachar case in paragraph 9 on this matter: