Chaim Fruchter

Using his own creative techniques, Adv. Fruchter has successfully represented defendants in over one hundred class actions.

Advocate Fruchter won the “Pri Ha’emek” case (1991), in which the court overturned the hitherto prevailing perception that the general meeting could distribute deficits to its members.

Relying on the concept of collective responsibility, 28 Jezreel Valley kibbutzim demanded that eight moshavim share in the deficit of the former Central Cooperative Society Pri Ha’emek Enterprises. The moshavim pleaded that there was no legal basis for such demand. The arbitrator ruled that each moshav had to contribute over one million dollars towards the deficit, a ruling which might have resulted in each moshav rolling over the debt to its individual members, each of whom would end up being charged hundreds of thousands of Shekels. The court held that the demand does not correspond with Pri Ha’emek’s articles of association and that the regulation published by the Minister of Labor permitting deficit sharing had been enacted ultra vires.
Pri Ha’emek is a leading judgment in cooperative societies’ law, studied by thousands of law students, and an important milestone leading to the enactment of the Gal Law.

• For the District Court judgment (1989):
  
• For the Supreme Court judgment (1991):

Advocate Fruchter represented 142 local authorities in a collective claim against the Israel Land Administration (ILA). The ILA was accused of having systematically breached, for many years, the agreement between them concerning payment of an alternate appropriation levy without the local authorities’ knowledge, by not transferring to them the full alternate appropriation levy sums to which they were entitled.
This was an extremely complex case of unprecedented dimensions which ended in a settlement in the Supreme Court and payment of NIS 1 billion by the ILA to the local authorities.

•  For the District Court judgment
  
• For the Supreme Court judgment 

Advocate Fruchter intensively assisted KM Gedalia Gal in enacting the Family Agricultural Sector (Arrangements) Law 5752-1992 (AKA “Gal Law”), and was a member of the work teams drafting and promoting.

The Gal Law was a lifeline in rehabilitating the family farms in moshavim.

In the 1980s the banks used to have unsuspecting individuals sign guarantees for their customers’ debts, without first disclosing to them essential information regarding the debtor’s current situation. As a result, many signed guarantees which they would not have assumed had they received such information at the relevant time.

Advocate Fruchter won the case of United Mizrahi Bank versus Prof. Zvi Ziegler, the precedent-setting judgment. The court held that the Bank had to voluntarily disclose to a guarantor all information in its possession before signing the guarantee.

The judgment marked an important step towards enactment of the currently-accepted guarantor protection rules.

• For the District Court judgment
  
• For the five-judge panel Supreme Court judgment

Advocate Fruchter provided ongoing advice to the Tnuva “Yagur Conference” Preparatory Committee, in particular regarding the option to distribute shares to its members, enabling them control, and giving them the option to sell their shares, without transforming the cooperative into a limited company.
Amending the Articles of Association at the Yagur Conference created the legal foundation to enable the entry of investors to Tnuva and unlock value to Tnuva’s members, while retaining the cooperative society framework with the advantages entailed. These steps enabled Apax to enter Tnuva as a partner in 2008.

• http://www.globes.co.il/news/article.aspx?did=858607

Advocate Fruchter represented four leading building contractor companies which were awarded damages in the sum of NIS 60 million for loss of profits because the State failed to make available to them the land earmarked for the construction project.

The judgment set an important precedent in contract law regarding the manner in which a contractor could be compensated for loss of profits resulting from an unexecuted project.

The five-judge panel Supreme Court judgment

For over 25 years, Advocate Fruchter has served as a lecturer in the Technological Entrepreneurship course taught at the Technion, a course founded by the Nobel laureate in chemistry, Professor Dan Shechtman