Derivative Lawsuit Filed Against Doron Kimelov and Tomer Food Over Merger and Financial Misconduct
A derivative lawsuit amounting to 2.5 million shekels was filed on Wednesday against Tomer Food, its controlling shareholder Doron Kimelov, and the company's directors. The suit was submitted to the Economic Department of the Tel Aviv District Court by shareholder Kfir Sapir. Sapir alleges that Kimelov acted in bad faith during negotiations to merge Tomer Food into a publicly traded shell company, misrepresented the private company's value and inventory, and thereby breached his fiduciary duties and fairness obligations to the company.
The plaintiff further claims that Kimelov and other company officers, who have served since the merger began, acted disloyally by failing to appoint a chief financial officer (CFO) from the merger's effective date until May 2026. They also allegedly hastily approved the merger deal without sufficient scrutiny, causing the company to overpay Kimelov for the private entity, ignoring inventory irregularities. Additionally, Kimelov is accused of appointing four of the six company directors, including himself and his son-in-law.
Trading in Tomer Food shares was suspended two days ago by the Tel Aviv Stock Exchange due to unclear circumstances surrounding the CFO Avital Perlstein Cherney's refusal to assume her role. The Israel Securities Authority is concurrently investigating the company’s prior disclosures and the need for clarifications regarding recent reports. Tomer Food initially announced on August 19 that the CFO's resignation did not involve material information for investors but later revealed on August 21 that her decision related to inventory management issues at its subsidiary, Tomer Import and Food Marketing.
On August 24, the company informed the stock exchange of uncertainties potentially impacting its share prices, prompting the trading halt until the stock exchange board meeting on September 8. Tomer Food is expected to release its Q2 financial results by the quarter's end, with adjustments based on ongoing audits by company accountants BDO and other parties.
According to the lawsuit, the merger completed in May granted Kimelov approximately 70% ownership of the public company valued at 77.5 million shekels, making him the controlling shareholder. He was appointed chairman with a monthly salary of 98,000 shekels plus a profit-based bonus potentially reaching one million shekels annually. Despite the public company’s valuation at about 138 million shekels, no full-time CFO was appointed for three months post-merger. After a prolonged vacancy, the newly appointed CFO resigned within eight days, citing inventory irregularities discovered in the private Tomer Food entity. The lawsuit asserts that these management failures led to an excessive allocation of shares to Kimelov, harming the company.