Supreme Court Rejects Magnezi Appeal in Aviron External Director Dispute
The Israeli Supreme Court rejected Gabriel Magnezi's appeal, upholding the disqualification of his votes in appointing an external director at Aviron, a publicly traded company co-owned with Shapir Engineering.
The legal dispute between Gabriel Magnezi and Shapir Engineering, shareholders in the publicly traded company Aviron, has dealt a blow to Magnezi as the Supreme Court rejected his request for leave to appeal.
Supreme Court Justice David Mintz upheld the District Court's decision to disqualify Magnezi's votes in the appointment of an external director (external director / datatz) at Aviron's general meeting.
Supreme Court Ruling
"I have not found that Magnezi has managed to point to a reason that would justify intervention in the decision at this stage," Justice Mintz noted, ruling that the underlying questions will be debated in the main proceeding.
Mintz emphasized that he is generally disinclined to interfere with temporary relief rulings unless exceptional circumstances arise, given the trial court's discretion. He added that the District Court properly weighed the balance of convenience and the potential damage to the company from lacking a second external director.
"The alternative mechanism was not meant to replace the initial process of appointing an external director through the presentation of candidates," Justice Mintz stated.
Dual Competence Requirements
Gabriel Magnezi holds a 28% stake in Aviron through Magnezi Industries. Following the District Court's ruling to disqualify his votes amid a deadlock between shareholders exercising veto rights, Magnezi petitioned the Supreme Court.
He argued that an external director must possess specific expertise to oversee Aviron's transactions with Shapir Group, preventing potential conflicts of interest. However, the court noted that the temporary appointee, former Member of Knesset Ayelet Nahmias-Verbin, possesses adequate qualifications, having served as a chairperson in a relevant industry for a decade.
The main proceedings will continue to determine the permanent oversight structure, while minority shareholder rights remain reserved pending the final verdict.
