“The sole purpose of the petition for a temporary remedy was not to avoid oppression of the minority, but to pressure Eden Springs into buying from the petitioner the 30% of the Espresso Cafe-Italia (formerly Hubar Israel) shares still in its possession, at the option price," the Tel Aviv District Court ruled today. The court thereby rejected Espresso Cafe-Italia's petition for a temporary remedy against Eden Springs.
Espresso Cafe-Italia petitioned that Eden Springs be forbidden to hold negotiations with large food companies that compete against Italy's Lavazza for the sale of Eden Springs' stake in Lavazza-Espresso Point, which owns the Lavazza espresso maker franchise in Israel
Espresso Cafe-Italia also petitioned that Eden Springs be forbidden to change or restructure Lavazza-Espresso Point by merging its operations with its subsidiaries Fresh Cup or Aviel.
Espresso Cafe-Italia alleges that it signed a contract with Eden Springs in August 1998, under which it sold to Eden Springs 70% of Lavazza-Espresso Point for $1.5 million, plus an option to sell the remaining shares for $1.8 million.
Espresso Cafe-Italia further claims that in March 2002, it notified Eden Springs that it was exercising the option. However, Eden Springs rejected the notice, on the grounds that Lavazza had notified Lavazza-Espresso Point in late 2001 that it was canceling its exclusive franchise in Israel.
Judge Yehuda Zaft said the temporary remedies were not intended to serve the petitioners main claim – to declare the options valid. Eden Springs was obliged to act as it saw fit. If Espresso Cafe-Italia were to win its remedy, it would be left without any shares in Lavazza-Espresso Point, and would have no standing or interest in the company or its business relations with Eden Springs.
Zaft emphasized that Eden Springs denied the existence of any negotiations to sell its stake in Lavazza-Espresso Point to a food company competitor of Lavazza, and it denied any intention of restructuring Lavazza-Espresso Point or merging it with another company.
The petition was rejected, and Espresso Cafe-Italia was ordered to pay Eden Springs NIS 30,000 court costs.
Published by Globes [online] - www.globes.co.il - on September 19, 2002