Derivative actions are a tool with which shareholders or directors, and in some cases creditors, can enforce the company’s rights against a third party, where the company’s management fails to do so. More often than not, derivative actions are filed by minority shareholders who feel that the controlling shareholder or someone on his behalf has a conflict of interest and does not have the company’s best interest in mind. In such circumstances, shareholders, directors or creditors can instruct the board to enforce the company’s rights, and if the board does not comply, they may petition the court to for leave to file a derivative action in the name of the company. In some cases, before a petition to the court to approve a derivative action, a motion for discovery is filed so that the petitioners can collect the information they need to prepare the action.

Our Firm represents leading companies in Israel in various derivative actions, including in the context of some of the largest and most high-profile transactions. Over the years, we have handled numerous petitions for leave to file derivative action and motions for discovery in this context.