Connect with us

Hi, what are you looking for?

Jewish Business News


Cedar Venture Capital Fund doesn’t Want to be Taken for a Ride

 / By Itzhak Dannon /

While the deal for the conveyance of Nolio, Ltd., compensates the CEO and co-founders well beyond the value of their stake in the company, it deprives Cedar Fund III, LP, of what it is entitled to, financially, contractually, and legally, claims the latter.

Please help us out :
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at
Thank you.

CedarFund_LogoCedar Fund III, LP, a venture capital fund, petitioned the Lod District Court to declare as invalid the transaction by which the U.S. software company Computer Associates (CA) purchased the Israeli high-tech company Nolio, Ltd., of Kfar Saba (Nolio). Cedar is alleging that the former attempts to force it to sell and/or transfer its shares (totalling32.6%) in Nolio to CA’s hands. Cedar also seeks judicial recognition that it remains the owner of the Nolio shares respondents allegedly sought to divest it from.

Cedar claims that till the date of the transaction between Nolio and CA, it was the largest shareholder in Nolio and was the source of most of the funds invested in the company, having put in about 67% of the total funds ever provided to Nolio. That notwithstanding, Cedar avers that Nolio and CA completely ignored it and its legal and contractual rights, and despite repeated attempts by Cedar to contact CA, it was just ignored, which disregard included its rights stemming from ownership of shares. Cedar maintains that this alleged conduct by its adversary effectively divesting it of its property in violation of law and proper corporate procedures.

nolio-logoThe lawsuit alleges that the transaction in which Nolio was sold to CA for $43 million is one between interested parties that was not properly and duly approved. According to Cedar, the transaction may be characterized as one between interested parties as can be ascertained from compensation payments promised the company’s CEO (Doron Gerstel) and its founders (Alon Eizenman and Eran Sher), which far exceeds the compensation they would receive for the sale of their stock and, conversely, due to various concessions Nolio’s shareholders were required to accept, in relation to, and for the benefit of, officeholders of the corporation.

Cedar also claims that in this case the necessary conditions that must occur in order to allow a forced sale of its shares in Nolio did not materialize. Moreover, it states that the general stockholders meeting held in early February, which approved the transaction with CA, was not properly called.

In conclusion, Cedar Fund argues that an improper procedure was engaged in where, not only was it required to sell its shares in Nolio, a move was made to compel it to undertake a number of significant commitments including: taking of indemnification liabilities in favor of CA and forcing it to acquiesce to a two years delay in the payment of millions of dollars it is entitled to receive by virtue of the transaction, as security measure of those indemnification arrangements.



You May Also Like

World News

In the 15th Nov 2015 edition of Israel’s good news, the highlights include:   ·         A new Israeli treatment brings hope to relapsed leukemia...


The Movie The Professional is what made Natalie Portman a Lolita.


After two decades without a rating system in Israel, at the end of 2012 an international tender for hotel rating was published.  Invited to place bids...

VC, Investments

You may not become a millionaire, but there is a lot to learn from George Soros.