Class Action Settlement Sees Lawyers Gain Significantly More Than Claimants
A class action lawsuit filed against the Kobi Maimon Group, alleging a NIS 251 million loss to shareholders in 2017, has concluded with a settlement of NIS 12 million. The settlement, reached after seven years of legal proceedings, represents only 5% of the originally claimed damages. Under the agreement, the Kobi Maimon Group will receive NIS 9.5 million, while the plaintiffs and their legal representatives will receive NIS 2 million, plus additional expenses.
This distribution means that the initiators of the lawsuit and their lawyers will receive approximately one-sixth of the total settlement amount. Specifically, attorney Ido Eisen is set to receive NIS 1.9 million, and the plaintiffs themselves will receive NIS 115,000. The article highlights this outcome as an example of how class action lawsuits often primarily benefit the plaintiffs' attorneys rather than the public they are intended to serve.
The original claim stemmed from the merger of Kobi Maimon's Equital with Yoel, where the real estate value of Airport City (owned by Yoel) was assessed at NIS 9.1 billion. The plaintiffs argued that Airport City's 2017 reports should have reflected a NIS 500 million increase in real estate value, which should have been recognized in the 2016 reports used for the merger. The defense, including Haim Tzach, argued that these were professional valuations by external appraisers.
Tel Aviv District Court Judge Ariel Zimmerman reportedly indicated to the plaintiffs the difficulties in challenging professional appraiser opinions and encouraged a settlement. Following mediation, the parties agreed to the current terms. The settlement applies to those who bought Equital shares before March 30, 2017, and sold them within a year, or those who bought before March 30, 2018, and sold by the end of October of that year. A minimum compensation of NIS 20 per group member is stipulated, with any undistributed funds to be transferred to the Ministry of Justice's class action fund.
