Guatemala Litigation

For more than two decades, Lisa, S.A. — a lawful 25% shareholder of the Avícola Villalobos Group — has been subjected to one of the most extensive and aggressive litigation campaigns seen in Guatemalan corporate history.

At its core, Lisa’s own legal actions seek to recover dividends wrongfully withheld since 1999, now valued in the hundreds of millions of U.S. dollars. These dividends, along with Lisa’s shares, have remained under embargoes imposed and perpetuated by the Villalobos companies. The embargoes have served a single strategic function: to block Lisa from receiving or enforcing its economic rights, even though the value of the dividends and equity far exceeds the amounts secured by the embargoes.

Instead of addressing their outstanding obligations, the Avícola Villalobos Group launched more than 100 lawsuits aimed at defeating Lisa procedurally, exhausting its resources, and using the judiciary as an instrument of pressure. Courts at all levels have repeatedly recognized these cases as premature, defective, unproven, or legally untenable, and have overwhelmingly ruled in Lisa’s favor.

The litigation falls into four categories, each reflecting a pattern of weaponized procedure and abusive filings.

Villalobos companies filed a series of nearly identical damages suits alleging that Lisa’s shareholder litigation caused them “harm.” These suits attempted to invert reality: Lisa’s litigation was aimed solely at recovering massive unpaid dividends, yet the Villalobos entities sought to cast this defense as tortious conduct.

Courts consistently found the damages suits to be:

• Premature – rooted in exclusion resolutions that were not final, rendering damages claims legally impossible.
• Factually baseless – no plaintiff proved causation or damages; evidence was speculative, irrelevant, or non-probative.
• Procedurally defective or time-barred – cases were dismissed for filing errors and violations of the one-year prescription period.

Legal reality: These cases functioned as retaliatory tools, designed to punish Lisa for attempting to recover dividends and to complicate the litigation environment surrounding the embargoes.

Beginning in 2017, the Group initiated an unprecedented wave of 62 lawsuits claiming that Lisa’s dividends — accumulated since 1999 and worth hundreds of millions of dollars — had “prescribed.”

Courts rejected these claims on multiple grounds:

• Incorrect procedural track – plaintiffs filed ordinary civil suits instead of mandatory summary commercial proceedings.
• Violation of arbitration clauses – several companies ignored their own bylaws, forcing courts to dismiss cases for lack of jurisdiction.
• Defective pleadings – dozens of cases were rejected for missing minutes, incomplete evidence, or failure to meet procedural standards.
• Substantive impossibility – Lisa demonstrated that dividends were never exigible because boards failed to establish payment terms; prescription was suspended by embargoes, many imposed by the plaintiffs; and declared dividends are property rights not extinguished by prescripción.
• Binding constitutional precedent – the leading case (Exp. 01044-2018-00313), rejected at all judicial levels, foreclosed the theory entirely.

Legal reality: This was a structured effort to permanently eliminate Lisa’s entitlement to hundreds of millions of dollars by manufacturing prescription defenses through repetitive, fragmented filings.

Villalobos companies attempted to frame Lisa’s lawful efforts to recover its dividends — including amparos, commercial suits, and criminal complaints — as an “abuse of right.”

Courts rejected these claims because:

• Plaintiffs lacked standing – many were not parties to the underlying proceedings they challenged.
• No evidence of bad faith, causation, or damages – courts uniformly held that Lisa’s litigation was legally justified and constitutionally protected.
• Misrepresentation of protected conduct – filing lawsuits, including in foreign jurisdictions, is a legitimate means of enforcing economic rights.

Legal reality: These cases sought to criminalize Lisa’s pursuit of its own dividends, reframing lawful enforcement actions as improper conduct.

The most direct attack on Lisa was the attempt to expel it from the Group — a move that would eliminate both its hundreds of millions in dividend claims and its equity stake.

Courts found the exclusion proceedings to be:

• Untimely under Article 230 – Villalobos companies acted years after the alleged misconduct, far beyond the three-month statutory window.
• Procedurally invalid – many exclusions were approved in ordinary, not extraordinary, assemblies, violating corporate law.
• Confiscatory effect – the companies attempted to exclude Lisa without any compensation, a measure that Guatemalan corporate law does not permit.
• Lack of evidentiary support – allegations against Lisa were unproven or attributed to unrelated third parties.

Landmark nullification: In Avícola Las Margaritas (Exp. 01165-2011-1081), courts nullified the exclusion at every level, including the Supreme Court.

Legal reality: The exclusion campaign attempted to remove Lisa without compensation and thereby eliminate its right to the dividends withheld since 1999.

A central feature of this litigation campaign has been the strategic use of embargoes:

• Lisa’s dividends and shares were placed under judicial embargo in various proceedings.
• The Avícola Villalobos Group then used serial, overlapping lawsuits to keep those embargoes in place for as long as possible.
• The value of the embargoed dividends and shares is vastly greater than the amounts allegedly secured by those embargoes, turning them into a tool of leverage rather than a proportionate procedural guarantee.

Instead of paying the dividends owed since 1999 and releasing Lisa’s rights, the Avícola Villalobos Group used the courts to freeze, delay, and pressure, converting provisional measures into a long-term mechanism of control.

Despite the scale and intensity of this campaign:

• Lisa remains a 25% shareholder of the Avícola Villalobos Group.
• Its claims to decades of unpaid dividends — worth hundreds of millions of USD — remain alive and enforceable.
• Most damages, prescripción, abuso de derecho, and exclusion suits have been dismissed, many with final and binding decisions in Lisa’s favor.
• Existing jurisprudence makes further attempts to exclude Lisa or extinguish its dividend claims legally and strategically precarious for the Avícola Villalobos Group.

In summary, the Guatemalan litigation shows not a typical shareholder dispute, but a long-running, abusive use of litigation and embargoes designed to prevent Lisa from collecting the enormous dividends and corporate value that are rightfully associated with its 25% stake.