March 27, 2017 / 9:18 PM / a year ago

UPDATE 1-Avianca countersues No.2 shareholder over United deal

March 27 (Reuters) - Colombian airline Avianca countersued its No. 2 shareholder on Monday, escalating a battle over a plan by top shareholder Synergy Group Corp to forge an alliance with United Continental Holdings Inc.

Avianca’s motion seeks to dismiss claims in a lawsuit filed by Kingsland Ltd in February and opposes Kingsland’s motion for an injunction filed earlier this month to stop the United negotiations by Synergy, which holds 78 percent of Avianca voting shares.

“Avianca has at all times performed its role under the parties’ shareholder agreement, while Kingsland has explicitly breached its obligations,” a statement issued by the company said. “Avianca points out that Kingsland’s legal maneuvers are a heavy-handed attempt to obtain greater rights in the courtroom than it previously negotiated for and agreed to in the parties’ shareholder agreement.”

The countersuit by Avianca asks the court for an order preventing Kingsland from any further dissemination of the company’s “confidential information, requiring Kingsland to comply with the dispute resolution section of the parties’ shareholder agreement, and requiring Kingsland’s representatives to cease interfering with the shareholder agreement.”

The countersuit names Roberto José Kriete, Kingsland’s chairman, as a defendant, calling him a “disloyal director who has worked actively to undermine the company’s strategic goals, all for his own selfish purposes.”

Representatives from Kingsland said they were still reviewing the filing, but said the company stands by the allegations in its lawsuit and “firmly believe that Kingsland has complied with all its obligations under the shareholders agreement and otherwise and reject any assertion that Mr. Kriete has acted improperly in any way.”

Kingsland and Avianca were set to meet in New York State Supreme Court on Tuesday so a judge could rule on Kingland’s petition for a preliminary injunction. However, representatives told Reuters the court date had been moved to April 6.

Kingsland, which holds about 22 percent of Avianca’s voting shares and 14 percent of total shares, said in the February lawsuit it is seeking “injunctive relief to prevent the cabal of insiders that controls Avianca ... from proceeding with their unlawful attempt to ram through the egregiously one-sided United Transaction in order to divert hundreds of millions of dollars to themselves in violation of their fiduciary and contractual duties.”

Synergy is the holding company of Bolivian entrepreneur German Efromovich and Kingsland’s lawsuit specifically names him as a defendant, though he is not listed as a plaintiff in Monday’s countersuit on behalf of Avianca. (Reporting by Dion Rabouin; Editing by Marguerita Choy and Lisa Shumaker)

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