TEL AVIV, Israel
May 30, 2012
Elbit Imaging Ltd. (
) (NASDAQ: EMITF)
, announced today that the Israeli Supreme Court in the framework of an appeal of Civil Case #1318/99 (Gadish v. Elscint et. al.) had partially accepted an application to certify claims against Elscint Ltd. ("Elscint"), Elron Electronic Industries Ltd. ("Elron") and others, as a class action. This case was initially filed in the District Court of
by a number of institutional and other shareholders of Elscint (a subsidiary of the Company which was merged into the Company during 2010) against Elscint, the Company, their controlling shareholders (Europe Israel (MMS) Ltd. ("EIL") and Control Centers Ltd.) and past and present officers and directors of such companies and certain unrelated third parties.
The said application to certify the lawsuit as a class action was based on few arguments and causes of action, while the leading cause of action that related to an alleged breach by the Company of its duties by not conducting a tender offer to purchase the minority shares of Elscint, was dismissed by the Supreme Court. Nonetheless, the Supreme Court had accepted that the secondary cause of action, namely, that the acquisition by Elscint of the hotel operations and the Arena commercial center in
,-from EIL and Control Centers, respectively, was done at allegedly higher purchase prices than their fair values (a claim that had not been proven and is denied by the Company) as well as certain causes of action regarding Elron's alleged misconduct (causes of action which do not relate to the Company), should qualify as class action.
The Company is still studying the Supreme Court's judgment and intends to vigorously defend itself against the claims on those causes of action that were approved as class actions as aforesaid. At this stage, before analyzing the judgment and as the ruling did not address the specific arguments but only whether the claims should be qualified as class actions, the Company is unable to assess the likelihood that the remaining claims against it shall be upheld.