Derivative Lawsuit Filed Against Discount Bank Over Failed CAL Sale
A first derivative lawsuit targets Discount Bank over the collapsed sale of CAL, as shareholders demand document disclosure following erroneous data submitted to the Competition Authority.
A first derivative lawsuit has been filed against Discount Bank following the failed sale of its credit card subsidiary, CAL. According to information obtained by Calcalist, a shareholder has sent a formal letter to the bank demanding document disclosure against the backdrop of data allegedly transferred to the Competition Authority that turned out to be incorrect.
As previously reported by Calcalist, the Authority had initially provided positive indications to the buyers and sellers of CAL — Union Bank, Harel, and Discount — that it would approve the transaction. However, within a few days, it became apparent that the representations submitted to the Authority, upon which the indications were based, were flawed. The Authority subsequently imposed an impossible condition on George Horesh's Union Group, demanding the sale of Union's holdings in Super-Pharm as a precondition for approving the acquisition.
Shareholder Gad Liebman, represented by Adv. Lior Lahav, claims that damages ranging from tens to hundreds of millions of shekels have been inflicted on both the bank and CAL. He argues that setting a penalty of 5% of the transaction volume to be paid by the buyers if the deal collapses — in the face of a known and recognized competitive risk — raises serious questions as to whether the bank priced the risk appropriately.
The letter further asserts that when incorrect representations were submitted on behalf of the bank or CAL, it created severe exposure to enforcement proceedings under the Economic Competition Law. More critically, the bank's credibility was compromised before the Authority and the Supervisor of Banks, precisely at a stage when the bank urgently requires their approval for an alternative path, whether through a sale to another buyer or by requesting regulatory relief. This damage remains tangible even if difficult to quantify.
Liebman is demanding access to correspondence with the Competition Authority, protocols of internal meetings concerning the sale, and documents detailing the decision-making process for selecting the buyer.
