Paca suing Teva for NIS 79m for disinformation, fraud
Yitzhak Danon
13.01.2002 15:59
Paca Industries filed a suit against Teva (Nasdaq: TEVA) at the Tel Aviv District Court today. Paca Industries filed the NIS 78.98 million suit against Teva, its subsidiary, Teva Assets, Teva Assets CEO Dov Shaham, Teva VP and Teva Assets chairman Aharon Agmon, and Ron Beery, owner of Beery Capital of Ramat Gan.
The suit was filed by Adv. Benjamin Levinbook, Adv. Yair Leibowitz, and Adv. Sharon Lubetzky. It stated that in 1998, an agreement was signed in which the claimant (at the time a subsidiary of Shemen Industries) bought Teva Assets' yeast factory for $14.5 million.
Paca Industries claims that following the signing of the agreement, it found out that certain facts and developments had led to the plant's profitability being completely wiped out. After being presented as most profitable, the plant very quickly posted major losses from month to month, threatening its continuation as a gong concern. The claimant claims its entire investment was wiped out.
Paca claims the.main development was the start of competing fresh yeast imports to Israel by the world's number one producer, French concern Lesaffre. Before the agreement was signed, no competition existed in Israel's fresh yeast market and Teva Assets had been declared a monopoly.
According to the claimant, it believed for a long time that it was simply unlucky to have bought a company that had been a monopoly for decades, with unexpected competition from imports beginning so soon after the acquisition.
However, a few years later, a pile of documents was discovered at the factory, apparently forgotten by Shaham on his last day as CEO of Teva Assets. The documents show that the respondents conspired to hide and intentionally misinform in order to sell an asset, which they knew was devoid of any real worth.
The claimant says the respondents concealed this information, and cheated and misinformed them during the negotiations in a serious breach of good faith, while intentionally making a false presentation.
The defense has not yet submitted its case.
Published by Israel's Business Arena on 13 January, 2002 |
