An operations manager tried to dissuade an investor from engaging with the shareholders in a transaction to purchase their shares, while continuously defaming the company and its shareholders and the transaction did not materialize. As a result, capital that was injected into the company by the shareholders as part of the negotiations was lost due to the company's entry into insolvency proceedings.
The Court accepted the claim and held the operations manager accountable for damage caused as a result of the defamatory publication. Defamation is, inter alia, a publication that may humiliate a person in the eyes of others or humiliate the person due to its actions, behavior or attributes attributed to it or that may harm its business or profession. Here, the manager of operations expressed himself in statements that attribute to shareholders and managers in the company corrupt management, illegal activity and lack of honesty. He also colluded behind the shareholders’ backs to remove them from office as part of the transaction. The operations manager acted in bad faith out of personal motives as he fed on various unfounded rumors that were exchanged between the employees and his actions led to a crisis of confidence and the failure of the transaction. Therefore, the operations manager will pay damages of hundreds of thousands of shekels for defamation and due to the entry of the company into insolvency proceedings.