Panamanian company Caballero Verde S. de R.L. which controls PLUNA (PU, Montevideo) is seeking damages from the Uruguayan government for allegedly leading to the carrier's demise in 2012, Aviation Week has reported.

Caballero confirmed it recently took full control of Latin American Regional Aviation Holdings S.A. (LARAH), another Panamanian fund which controlled 75% of PLUNA.

The new owner is seeking to sue the Uruguayan state based on an Uruguayan-Panamanian treaty protecting foreign investments. While the exact amount of claims has not been revealed, they are likely to run into hundreds of millions of US dollars. Both parties will initially have six months to settle the debate before it goes to international arbitration.

In 2007, the Uruguayan government sold a 75% stake in PLUNA to Leadgate, a now-defunct private equity firm. In 2010, Canada's Chorus Aviation invested USD15 million into the carrier, receiving a 33% stake from Leadgate. Leadgate and Chorus controlled PLUNA indirectly via LARAH.

Despite the initial growth, the airline succumbed to financial challenges and shut down in 2012. At that time, LARAH's shares were placed in a trust at the Montevideo Stock Exchange. Caballero plans to argue that the Uruguayan government's actions, including terms of payments to state-owned oil firms, contributed to the demise.

After the takeover of LARAH by Caballero, neither Chorus nor Leadgate hold any stakes in the company.

Uruguay currently has a single active scheduled carrier, Amaszonas Uruguay (Z7, Montevideo).