A FX/CFD tech partnership that generated millions in wealth has reached its breaking point, with an Israeli economic court ordering the sale of fintech company Panda Trading Systems to a third party after years of escalating conflict between its equal shareholders, according to the Israeli media outlet TheMarker.com.

Tech Partners' Bitter Split Forces Court to Order Panda Trading Systems Sale

Samuel Gutman and Maor Lahav, who founded Panda in 2007 and each own 50% of the company, failed to establish any mechanism for resolving disputes or separating their interests. The court noted this oversight created significant potential for expensive and lengthy legal proceedings when disagreements emerged.

The Haifa-based fintech company, which develops software solutions for foreign exchange (FX) and contracts for difference (CFDs) brokers and employs dozens of workers, had thrived for years under the partners' joint leadership. However, by late 2020, trust between Gutman and Lahav deteriorated significantly, leading to what the court described as an intense and passionate dispute.

Since 2022, the court has been forced to intervene repeatedly in the company's operations. In an unusual move, Judge Dr. Muhammad Ali previously removed Lahav from the board of directors and appointed accountant Yair Shalhav as a decisive director empowered to break deadlocks on controversial issues.

Panda has been collaborating with various brokers in the FX/CFD industry for years, offering solutions that enable the launch of a new trading firm from scratch within 30 days. In recent years, its partners have included Moneta Markets, which has leveraged its tools to create a new web-based platform for retail traders.

Changed Positions Complicate Resolution

While both partners initially agreed separation was necessary, the method proved contentious. According to court documents, Lahav initially supported selling the company to a third party but later reversed his position, demanding Gutman purchase his shares based on the company's historical value from early 2021.

The court ruling indicates Judge Ali found Lahav's shifting stance problematic, noting it could be dismissed under the principle of "judicial estoppel" - which prevents parties from taking contradictory positions in the same legal proceeding.

The court also noted that Lahav had made serious allegations that could potentially damage the company's value and sale prospects during the proceedings.

After examining the case merits, Judge Ali determined that selling to a third party represented the most equitable solution for both parties. The court concluded this approach preserves the relationship between the parties, allows for a fair price for both sides, and will bring a final end to the dispute by severing the relationship, particularly given the sour relations and complete lack of trust.

What’s Next for Panda

The court has tasked decisive director Shalhav with developing a detailed plan for selling the company or its operations, including subsidiaries, which must be submitted to the court for approval.

Additionally, the judge granted the company's request to disconnect Lahav from all company systems and prohibited him from sharing any company information with third parties, citing concerns over potential misuse of sensitive data.

"The comprehensive and thorough ruling constitutes a principled legal decision in a situation requiring 'separation of powers' between warring shareholders, in the absence of a dispute resolution mechanism or defined separation method in a company's founding documents,” attorney Yotam Blauschildt of Herzog law firm, representing Gutman, commented for TheMarket.com.

"It's appropriate to learn from this case that it's advisable to consider these mechanisms in the early stages of establishing any company."

Lahav was represented by attorneys from Goldfarb Gross Zeligman, who did not provide comment on the ruling.