Former Israel Phoenix Assurance CEO Itamar Borovitz has filed his response at the Tel Aviv District Court to a petition in the name of Israel Phoenix Assurance (TASE: PHOE1;PHOE5) for approval of a derivative claim.
Israel Phoenix shareholder Meir Yamin filed the petition, claiming violation of duty of care and breach of trust towards Israel Phoenix on Borovitz’s part. The petition concerns the 1997 compromise agreements between Israel Phoenix and some reinsurers of La Nationale, an Israel Phoenix sub-subsidiary.
Yamin alleged that the payment to the reinsurers was higher than the price that Israel Phoenix would have paid under ordinary market terms, and that the price difference was designated for secretly paying some of La Nationale’s debts to those overseas reinsurers.
In his response, Borovitz asserted that the compromise agreements were proper and good, and stemmed from Israel Phoenix’s business considerations. The public was immediately informed of the signing of the agreements, and the agreements were included in Israel Phoenix’s reports and public documents. Everything was legal, with appropriate transparency, and even beyond it.
Borovitz denied the petitioner’s allegation that Borovitz had been aware that the agreements did not reflect regular market terms. He denied that the agreements were designed to finance La Nationale’s debts, and that he had concealed this fact from Israel Phoenix, and caused the company to sign agreements that were not in its best interests.
Borovitz asked the court to dismiss the petition for approval of a derivative claim against him.
Published by Globes [online] - www.globes.co.il - on October 13, 2004