Legal Updates

It is possible to assign a right of claim of a company in liquidation to some of its shareholders if it is for the benefit of the company

September 11, 2017
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Minority shareholders of a company in liquidation sought to receive the right of claim of the company against the majority shareholders.

The Supreme Court held that a decision regarding assignment of right of claim is at the discretion of the liquidator, based on the economic logic underlying the decision and examining a variety of additional considerations that are intended to reflect the best interest of the company. Shareholders do not have a standing to object to the decision of the liquidator regarding the assignment of the right of claim and their contentions may be raised in the framework of a claim filed against them, should such be submitted.  Here, the decision of the liquidator to assign the right of claim of the company serves to enrich the company's accounts by financing the expenses of the legal actions by an external party, thus correctly reflecting the benefit of the company.