Onbancorp said it would continue litigation against a dissident shareholder despite his statement that he is backing down because of an injury.

On Tuesday, Seymour Holtzman, who owns 2% of Onbancorp's stock, said he would withdraw his proposal to the board that it sell or merge the bank. Mr. Holtzman said he had broken two ribs in a bicycle accident.

Robert J. Bennett, Onbancorp's chairman and chief executive officer, suggested Mr. Holtzman is using the injury as an excuse to avoid testifying in the litigation over the solicitation effort.

The Onbanc chairman suggested that Mr. Holtzman eventually will renew his effort to force a sale or merger, and that the bank still wants to take his sworn testimony.

Charles Garcia, a spokesman for Mr. Holtzman, said he won't push his plan at the 1997 shareholder meeting. Mr. Garcia, of the Garcia & Cope law firm in Boca Raton, Fla., cited the "heated" litigation.

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