Israeli Court Dismisses Class Action Against Tarya Over Valuation Claims

The Tel Aviv District Court has dismissed a class-action lawsuit filed approximately three years ago against Tarya P2P (formerly Luzun Real Estate and Finance), controlled by Amos Luzun, its directors, and valuation firm C-Value. The lawsuit, brought by shareholders, alleged that they suffered damages due to a flawed merger with Tarya P2P in 2022, based on a negligent and incorrect valuation.

Shareholders claimed the company withheld crucial information that could have influenced their votes at a shareholder meeting regarding the merger. The plaintiffs, Walter Tip and Israel Keller Engineering Services, asserted that shareholders incurred tens of millions of shekels in damages. The merger, approved in 2022, valued Tarya at around 320 million shekels, contingent on Tarya being valued at at least 300 million shekels and Luzun selling its existing real estate operations for 70 million shekels.

Judge Michal Rozen-Ozer ruled that the alleged damages were to the company itself, not directly to the shareholders, thus the cause of action belongs to the company and should be pursued through a derivative lawsuit, not a class action. The court stated, "The damages claimed by the applicants stem from the company's damages, as it was calculated as a consequence of its value."

The shareholders argued for a personal cause of action based on a misleading statement in a securities filing, specifically citing incorrect data in the valuation report. However, the court found no evidence that the applicants bought or sold shares after the alleged misleading statement was published, negating their personal claim. The court also noted that even if their claims were valid, they failed to present facts establishing a personal cause of action.

Defendants did not file substantive responses, only motions to dismiss, which were granted. Legal representation for the parties involved included attorneys from various prominent Israeli law firms.