Teva's executives and directors, who approved the failed Rimsa deal in 2015 will pay the company $ 26 million

Teva's executives and directors, who approved the failed Rimsa deal in 2015, will pay the company - through the companies that insure them - $ 26 million (approximately NIS 81 million). This was stated in the settlement agreement reached in a mediation procedure with retired judge Hila Gerstel and was approved today by Judge Oren Schwartz of the Central District Court.
The application for approval of a derivative claim was filed in 2016 by shareholders Gur Tzemach and IAAS, who claimed that the defendants (most of whom are no longer in the company) failed to manage and approve the deal, in which Teva acquired Mexican Rimsa for $ 2.3 billion in 2015. Shortly after the acquisition, Teva discovered that Rimsa had systematically defrauded the Mexican authorities regarding its products. Among the defendants were former CEO Erez Vigodman, former CFO Eyal Desha and former director Galia Maor.
After complex court proceedings, the parties sought mediation at Gerstel, and reached a compromise.
The judge ruled that the settlement amount reflects the risks and chances in the lawsuit in light of the damage caused to nature by the transaction. He added that this assessment, as to the fairness and reasonableness of the settlement amount, was also reflected in the opinion of the mediator Gerstel, and that there was no principled opposition to the settlement by the Attorney General and the Securities Authority. As part of its considerations, the court also took into account the compensation that Teva received in another legal proceeding it conducted in the United States against Rimsa's controlling shareholders.
In addition, the judge upheld the agreements in the settlement regarding the dismissal of the lawsuit against Citi - claiming that it had failed in its role of providing financial advisory services and due diligence of Rimsa. "The cause of action against Citi is borderline and requires the investment of considerable resources in proving it. I do not believe that dismissing the claim against Citi without an order for costs in any way detracts from the benefits of a settlement for Teva," it said.
In addition, it was determined that the insurance will pay the plaintiffs 'and attorneys' fees - NIS 11 million (before VAT), in addition to the amount of compensation to the company. Will receive NIS 1.5 million as compensation and reimbursement of expenses.