Africa-Israel Investments, controlled by Lev Leviev, will pay former Gottex controlling shareholder Leah Gottlieb $1.55 million. The parties reached a compromise, which the Tel Aviv District Court gave the force of a court ruling.
The parties signed an agreement in October 1997, under which Africa Israel bought 80% of Gottex. Gottlieb held 19%, and her daughters, Judith Gottfried and Miriam Ruzow, held 1%. Gottlieb and her daughters received an option to sell their Gottex holdings to Africa-Israel for $1.5 million.
Gottlieb filed suit against Africa-Israel last July, claiming the company was trying to deprive her of her remaining Gottex holdings and evade its obligations.
Africa-Israel claimed in response that it had invested $6 million in Gottex and provided a $27 million guarantee to release Gottlieb and her daughters from their personal guarantees and bonds. Africa-Israel also said it invested $1.1 million in acquiring Gottlieb's rights in a Tel Aviv property.
Africa-Israel also asserted it had saved Gottex, Gottlieb, and her daughters from loss of property. Africa-Israel further stated that Gottex's actual situation differed than what was presented before the deal, and much of the information given about Gottex was misleading and inaccurate.
Under the compromise agreement, Gottlieb and her daughters will transfer all their holdings in Gottex to Africa-Israel and sign a power of attorney and bonds for transferring rights for completing the transfer of the Tel Aviv property. Africa-Israel will pay $1.55 million for the complete and final withdrawal of all claims.
Gottlieb and her daughters agreed not to compete with Gottex in bathing and beach wear business for 15 months, either in Israel or overseas, and not to provide designer services to any Gottex competitor whatsoever in the same period. Gottlieb also committed to preserve absolute confidentiality regarding any information about Gottex.
Published by Israel's Business Arena on March 18, 2002