TORONTO - Canada 3000 Inc. is seeking $45 million in damages in a lawsuit against former top executives of Royal Aviation Inc., a Montreal-based airline it took over earlier this year.

In a statement of claim filed in Ontario Superior Court of Justice on Wednesday, the Toronto-based carrier is seeking $40 million in damages from Michel Leblanc, former chairman and president of Royal; the company itself, Groupe Royal Aviation Inc.; and Roland Blais, former chief financial officer.

As well, Canada's second-biggest airline wants $5 million in punitive and other damages and has asked the court to ban the executives from trading in Canada 3000 shares.

Canada 3000 accused the executives of fraud and misrepresentation in respect to the financial statement and other financial records of Royal Aviation Inc.

Canada 3000 bought Royal and Halifax-based CanJet Airlines earlier this year, creating a company with more than 4,400 employees and operations across Canada and overseas.

The $84-million, stock-swap deal for Royal was announced in January while news of the CanJet takeover, worth $7 million, came out in late March.

We have made considerable progress in integrating Royal's operations with those of Canada 3000 and CanJet, but we are disappointed with some of the issues we were forced to deal with when we formally took over Royal, Canada 3000 chairman John Lecky said in a release late Tuesday announcing the lawsuit.

While the prospects for Canada 3000 remain positive, this matter will negatively impact our short-term results.

Leblanc and Blais were not immediately available for comment.

Leblanc, who joined Canada 3000 as vice-chairman after the takeover and was instrumental in designing a unified schedule for the three discount airlines, left the company suddenly in June. No explanation was given for his departure.

In trading on the Toronto stock market Wednesday, Canada 3000 shares fell 15 cents to $7.80.