Alon Blue, Mega Retail subsidiary sued by shareholders and supplier

By Caroline Salls

Pittsburgh, July 14 – Alon Blue Square Israel Ltd. said a lawsuit was filed with the District Court in Tel-Aviv against Alon Blue and its Mega Retail Ltd. subsidiary in connection with Mega Retail’s 51% subsidiary Eden Briut Teva Market Ltd.

According to an Alon Blue news release, the lawsuit was filed by the minority shareholders of Eden, who claim that Alon Blue and Mega took actions that oppressed the plaintiffs as minority shareholders in Eden in connection with Mega and Eden’s filing for court approval for a stay of proceedings against Eden.

Alon Blue said the plaintiffs allege that it breached the agreement it executed with them when it invested in Eden, an investment which was later transferred to Mega, in order to coerce the plaintiffs to sell their holdings in Eden for below market value.

The plaintiffs are requesting that the court instruct Alon Blue to acquire their holdings in Eden for market value or at their value at the time of the company’s original investment in Eden.

Alon Blue said it denies both share valuations presented by the plaintiffs.

In addition, the company said a second lawsuit was filed with the District Court in Tel-Aviv against Alon Blue, Mega and former members of Mega’s board of directors by one of Mega’s dairy product suppliers.

Alon Blue said this lawsuit requests approval for a derivative claim and claims that in 2013, Mega unlawfully distributed a dividend in an amount of roughly NIS 100 million.

The plaintiff asked the court to instruct Alon Blue and the named directors to return to Mega all payments, dividends, benefits and/or rights received in connection with the distribution.

The plaintiff also asked the court to instruct Alon Blue and Mega to furnish it with specified documents and information about Mega, including its full financial statements for the years 2011 through 2014.

The company said it is reviewing both claims and denies all of the allegations.

Based in Rosh Ha’Ayin, Israel, Alon owns and operates supermarkets and specialty stores.

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