Bank Hapoalim bonus claims inflated to justify lawyers' fees
The NIS 3 million to be paid to plaintiffs' lawyers in the suit against Bank Hapoalim over its bonuses to senior executives seemed too high, at 10 percent of the total bonuses. So the bank turned the same NIS 3 million into only 5 percent of the total bonuses.
The lawyers in the suit, Amit Manor and Yaakov Shemesh, demanded 10 percent of the total bonus money refunded during the negotiations. The bank objected to that sum, claiming that 10 percent was much too high and would lead to a further public outcry, and would not receive court approval. The suit was filed only three months ago, proceedings in the case had basically not yet started, a defense brief had not even been filed yet. Therefore, Manor and Shemesh's efforts were considered relatively small, and did not justify such a large fee.
In fact, the real force behind the refund was the Israel Securities Authority and its head, Moshe Terry, rather than the lawyers who sued. Nevertheless, as part of the deal signed on Wednesday, the lawyers managed to get the NIS 3 million they had requested.
However, to justify such a large sum for so little work and time, the sides decided to make the amount look smaller - by half, in fact. They achieved this by simply increasing the amount of the expected, but unpaid, bonuses: The agreement included a section saying that the managers would give up specific future bonuses. However, they had already announced they would not take these - which were unconnected to the case anyway.
The theoretical amounts were estimated at NIS 50-70 million. This allowed the sides to say that the fees were only 5 percent of the deal and not 10 percent. However, the actual sum of money to be refunded is only NIS 26 million.
The actual plaintiff in the case, Hapoalim shareholder Shalom Vashdi, will receive an additional NIS 400,000. All of the sums are still pending approval by the court.
Meanwhile, the battle for stakes in Bank Hapoalim's controlling interest escalated yesterday: Israel Salt Industries, through which the Dankner family owns its shares in the bank, announced that it wants to appoint an arbitrator in its dispute with Shari Arison.
Arison and Dan Dankner met on Wednesday in an apparently unsuccessful attempt to resolve the crisis. Now, only a day after the sides agreed to disagree, scale down the battle and postpone further deliberations until after the holidays, the disagreement appears to be heating up.
The decision to demand binding arbitration, which clearly implies that the meeting was unsuccessful, also shows the Dankners' disappointment with Arison.
Arison is expected to agree to the request to appoint an arbitrator.