Avianca files counter suit in bitter airline battle

Colombia-based airline Avianca filed a counter lawsuit in New York on Monday in the latest round of a no-holds-barred legal battle between two Latin American tycoons over the strategic control of one of the region’s biggest carriers and its mooted alliance with United Airlines. Avianca and Gérman Efromovich, the carrier’s biggest shareholder, accused Kingsland Holdings, its second-biggest shareholder, of leaking boardroom secrets in an attempt to obstruct the negotiations with United. The lawsuit against Kingsland, a holding company for Avianca shareholder Roberto Kriete, follows a suit filed by Kingsland three weeks ago. The countersuit “concerns a disloyal director who . . . has worked actively to undermine the company’s strategic goals for his own selfish purposes . . . [and] has engaged in a smear campaign,” Avianca said in its complaint in New York State Supreme Court. The motion seeks to dismiss Kingsland’s claims and to overturn its injunction to stop Avianca’s talks with United. Kriete, a Salvadorean tycoon, has called the mooted United-Avianca strategic alliance a “sweetheart” arrangement which ignored better offers from other airlines and instead seeks to “shore up [Efromovich’s] other financially strapped business concerns”. Avianca responded on Monday that “Kriete has attempted to pressure United into abandoning any negotiations with Avianca because he perceives such a deal would not service his narrow self-interest and his other personal ventures in the aviation industry”. The flurry of legal action comes after United and Avianca announced in January plans for a strategic alliance, a $200m rights issue by Avianca and also its potential merger with OceanAir, a smaller Brazilian airline controlled by Efromovich.<br/>