A lawsuit has been filed against Priceline Group, accusing it of fraud in the acquisition of Monondo Group earlier this year.
Priceline Group, which owns Priceline.com, KAYAK and Open Table, stands accused of “fraud in its absolute purest form” by a lawyer representing Tersley, an early investor in Cheapflights.
The company alleges that Priceline kept quiet about the deal to buy Momondo from Highlander Worldwide Ltd – which was sealed 12 hours after a long-running dispute between Tersly Investments Ltd. and Highlander.
Tersly now says that, had it been aware of the deal, it would not have agreed to a release of future investment claims, which it says stripped Tersly of valuable investment rights.
Tersly says it would have been entitled to “substantial compensation” had the deal gone through before its dispute was settled.
A day after the dispute was settled, Priceline announced it was to acquire Monondo/Cheapflights for $550 million.
“This is fraud in its absolute purest form,” said Adam Levitt, Tersly’s legal counsel and a partner of DiCello Levitt & Casey.
“Priceline knew or should have known about Highlander’s involvement with Tersly through standard due diligence, including that Tersly had investment rights in any sale of Momondo/Cheapflights.
“Rather than disclosing the pending transaction to Tersly, Priceline knowingly conspired with Highlander to negotiate a bad-faith settlement that terminated Tersly’s future investment rights – which would have been substantial, given Priceline’s position in the travel industry.
“Such a settlement was a small price for Highlander to pay to clear the way for a $550 million sale.”
Travolution has contacted Priceline for a comment, but is yet to receive a response from the group.
The law firm’s full statement can be found here.