The Livnat and Manor families, Nochi Dankner's partners in the controlling core of IDB Holding Corp. Ltd. (TASE:IDBH), today signed a precedent-setting settlement in a class-action suit, and will return part of the dividends they received from the company in the past few years. The two families will return NIS 74 million in equal shares. The suit against Dankner will continue.
Most of the money will be returned in cash, about NIS 20 million by each family. The remaining NIS 16.8 million per family will be returned in IDB Holding shares, which the Livnat and Manor families bought in IDB's offering in 2012 (known as the "friends of Dankner offering").
The class-action suit was filed a year ago. The petitioners demanded that IDB Holding's controlling shareholders should return the money they withdrew from the company as dividends in 2008-10. The company distributed NIS 1.8 billion in dividends, of which the share of the Livnat and Manor families was NIS 489 million. The petitioners claimed that the distribution was illegal because it was made even though the company did not meet the solvency test.
In addition to the restitutions by the Livnat and Manor families, the settlement states that if the families sell IDB Holding shares in the coming years (each family own 11% of the company), they will return 25% of the proceeds to the company. The settlement also states that if IDB signs a debt settlement, the share of the Livnat and Manor families will be limited to the money they returned and will return under the agreement.
The settlement also states that Yaron Zelekha provided the financial opinion to the petitioners, and was paid NIS 125,000, excluding VAT, for his work. The petitioners' lawyers will receive 10% of the amounts that will be transferred to IDB.
During the ten years in which the Livnat and Manor families were part of IDB's controlling core, they were the main beneficiaries, alongside Dankner, from the billions of shekels in dividends that it distributed in its good years. (The dividends reportedly returned most of their investment in buying IDB shares). The Livnat and Manor families' fortunes are estimated at hundreds of millions of shekels each, which they built up in their traditional businesses: infrastructures for the Livnat family, and banking and vehicles for the Manor family.
Published by Globes [online], Israel business news - www.globes-online.com - on July 7, 2013
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