Tel Aviv Court Rejects Class Action Against Luzon Group Over Tarya Merger
The Tel Aviv District Court rejected a class action against Luzon Group over its 2022 Tarya merger valuation, ruling the claim must proceed as a derivative suit.
Three years after a class-action lawsuit was filed against Luzon Group (formerly Tarya), the Tel Aviv District Court rejected the motion. Judge Michal Agmon-Gonen ruled on the case involving Walter Tim and Israel Keller, former shareholders represented by attorney Lior Lahav, targeting Luzon executives and valuation experts following the 2022 merger.
The merger of Luzon and the non-bank credit company Tarya was approved by shareholders based on a valuation of 323 million NIS. The plaintiffs argued they suffered damages due to an inflated valuation, claiming Tarya's fair value was only between 128.5 million NIS and 162.7 million NIS because a portion of the company's revenues was conditional.
Court Ruling and Legal Grounds
Among the defendants were controlling shareholder Amos Luzon, his daughter Lia, and other officers including Ofer Keduri, Zita Patir, Tamar Bernoy Goutlin, Dalit Wichselbaum, Mordechai Karat, Eyal Alhiani, Asaf Shalush, Varda Lusthaus, Eli Gabriel, and Pierre Bessnainou.
Judge Agmon-Gonen accepted the defense's position that the alleged harm primarily affected the company itself, meaning the original cause of action belongs to the corporation rather than individual shareholders. Consequently, the correct legal procedure to address such claims is a derivative suit rather than a class action. Furthermore, the court ruled that the plaintiffs lacked a personal cause of action under the Securities Law as they did not execute a direct purchase or sale of securities proximate to the event.
"We respect the thorough analysis conducted by Judge Agmon-Gonen. The court found that this dispute is suited to be examined as a corporate claim rather than a shareholder suit, and therefore we will file a derivative claim in the coming days," said attorney Lior Lahav.
