Lawsuit Alleges Amper Boss Orchestrated Bidding War

adolfo

The $20 million lawsuit filed in the High Court against Spanish telecom company, Amper S.A. (BME:AMP) claims that Amper head Jaime Espinosa de los Monteros fraudulently orchestrated a bidding war for the sale of Amper’s Bluesky Pacific Group, damaging Bluesky’s former chief and deceiving Fiji-based buyer Amalgamated Telecom Holdings (ATH) in the process.

The suit was filed by Adolfo Montenegro, who served from 2008-2016 as Chief Executive Officer of Bluesky, a group of telecommunications companies operating in American Samoa, Samoa, Cook Islands and New Zealand.

Amper caused Bluesky to abruptly terminate Montenegro’s management contract on the same day in September 2016 that Amper signed a sales agreement with ATH, in which ATH agreed to buy Amper’s controlling interest in Bluesky for approximately $78.2 million.

The lawsuit alleges Montenegro’s termination was the culmination of Espinosa’s orchestration of a series of deceptions intended to drive up ATH’s purchase price and provide Amper an excuse to avoid paying Montenegro for his services.

Montenegro seeks to recover the amounts due on his management contract with Bluesky and an agreement with Amper entitling him to a percentage of the sale proceeds, as well as $20 million in punitive damages, which are imposed under U.S. law to punish egregious misconduct.

The lawsuit claims that Espinosa repeatedly encouraged Montenegro to organize a Management Buyout Offer(MBO) last year to compete with ATH’s preliminary offer.

The suit alleges that Espinosa did so in violation of a Letter of Intent between Amper and ATH prohibiting Amper’s solicitation of competing offers.

According to the suit, Espinosa committed fraud by initially lying to Montenegro about the prohibition in the Letter of Intent to induce the MBO and then misrepresenting to ATH that the MBO was unsolicited.

The lawsuit claims Amper was successful in using the MBO to force ATH to better its offer and in convincing ATH that Montenegro was an antagonist to the sale.

This, the lawsuit claims, resulted in Montenegro’s termination and provided Amper a disingenuous excuse not to pay him amounts remaining due on his contracts.

The lawsuit chronicles in detail meetings and email communications in which Espinosa encouraged Montenegro to organize the MBO and assured him it would be seriously considered by the Board. For example, Espinosa allegedly travelled to Paris immediately after Amper received ATH’s Letter of Intent and met with Montenegro to suggest that he organize the competing MBO.

Additionally, immediately following an early meeting between Espinosa, Montenegro, and ATH representatives regarding logistics of the sale to ATH, Espinosa met privately with Montenegro in his office and again encouraged Montenegro to organize a competing offer.

An email from Espinosa soon after those meetings allegedly implicates the entire Amper board of directors in the improper solicitation, as it allegedly states that the board would “look forward to receiving” the competing MBO by a specified deadline.

The lawsuit alleges Espinosa never had any intent to consider the offer but, instead, wanted to use it solely as a “stalking horse” to manipulate ATH.

According to the suit, Espinosa is believed to have taken steps to sabotage Montenegro’s presentation of the MBO at an Amper board meeting and to undercut the MBO’s support at the eleventh hour by colluding with a minority shareholder within the Independent State of Samoa.

Amper reported to Spain’s National Securities Market Commission and others that Montenegro was terminated because of his involvement in the competing MBO and purported interference with the sale. But Montenegro’s lawsuit, which frames Espinosa as the architect of that MBO, casts doubt upon Amper’s official version of events.

Amper and Bluesky have filed their own suit against Montenegro, accusing him of improperly converting company assets to personal use.

Montenegro said the allegations in Amper’s lawsuit are nothing more than a negotiating tactic.

“The lawsuit filed against me is a tactic Amper is using to avoid paying me monies I am owed. It is a continuation of the misrepresentations that Amper used to discredit me earlier. I look forward to responding to the allegations in Amper’s lawsuit.”

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