Basketball Club Ownership Battle Intensifies in Tel Aviv Court

The dispute over the ownership of the Maccabi Tel Aviv basketball club has escalated, with a major shareholder filing an urgent request with the Tel Aviv District Court. Richard Deych, representing VR Capital Group, is seeking to halt actions by the Racanati family and Shimon Mizrahi, which he claims are intended to alter the club's share structure and power balance before arbitration can resolve the underlying disagreements.

The core of the current legal action involves approximately 9% of Maccabi Tel Aviv's shares. Initially, a company controlled by Ben Ashkenazi offered these shares to Jason Levien for $18 million on September 2nd. Deych's company announced its intention to exercise its right of first refusal to purchase these shares under the same terms.

However, the situation became more complex when companies controlled by the Racanati family and Mizrahi also declared their intent to buy these shares, along with any remaining shares if other shareholders did not fully exercise their rights. Deych argues this move would reduce the number of shares his company can acquire through its right of refusal. He also points to a shift in strategy by his partners, who initially facilitated Levien's potential entry into the club but are now seeking to become buyers themselves.

Deych's filing highlights a discrepancy in valuation, noting that the Racanati-controlled company initially proposed selling shares to Levien at a club valuation of around $172 million, but now seeks to acquire shares in a deal reflecting a valuation of approximately $200 million. Deych contends that this price difference and the timing suggest a coordinated effort to change ownership and establish new facts on the ground before the arbitration process begins.

This request follows a previous court decision on September 6th, which stated that the disputed corporate actions would be considered provisional, pending arbitration. The validity of the transactions themselves was not decided, and the court urged the parties to expedite the arbitration. Deych was given the option to seek further relief if operational steps were taken based on these actions. The appointment of an arbitrator is still pending, with disagreements over whether Levien's company should be included in the arbitration proceedings.