Pasta Ricca Founders Withdraw Supreme Court Appeal in Dispute with Tnuva
The founders of Pasta Ricca have withdrawn their appeal to the Supreme Court concerning retroactive distribution fees and returns, following the recommendation of Supreme Court Justice Yechiel Katcher. Concurrently, the joint pasta company will pay Tnuva NIS 30,000 per month until June 2023 for the rental of two warehouses, which the founders claim Tnuva provided for their use free of charge.
The dispute stems from Tnuva's 2019 acquisition of a 51% controlling stake in Pasta Ricca (then Doro) for approximately NIS 21 million. This deal included an option for Tnuva to purchase the remaining shares, leading to a significant disagreement over the company's valuation four years later. The founders commissioned a valuation from Prometheus, estimating the company at NIS 142 million, while Tnuva's valuation from BDO placed it at NIS 79 million.
Since the disagreement arose, the founders filed four lawsuits against Tnuva, all of which were dismissed. The founders appealed to the Supreme Court regarding the first lawsuit, which sought to cancel board decisions to retroactively charge the joint company for rent and distribution fees. The parties agreed to a settlement proposal, acknowledging it was made in a spirit of compromise. Justice Katcher indicated that at least part of the appeal, particularly regarding distribution fees, would likely have been rejected.
Other dismissed lawsuits included one attempting to prevent accounting firm Goldfarb from serving as the pasta company's legal counsel due to its advisory role for Tnuva, and another demanding Tnuva purchase the founders' shares for NIS 50 million. An additional claim by co-founder Shi Elon alleging wrongful dismissal during reserve duty was also rejected.
In related news, Tnuva plans to relocate Pasta Ricca's factory to its spreads factory in Rehovot, an investment estimated at NIS 30 million. This move is partly due to a notice to vacate the current pasta factory in Beit Dagan. The Rehovot facility, currently producing milk and cream, will house the relocated pasta operations by the first quarter of next year. Pasta Ricca's estimated annual sales for 2024 are NIS 56 million, yielding a profit of NIS 12 million, with current monthly sales reflecting an annual pace of approximately NIS 70 million.
