Original Message:
Don't Pay the "Voluntary" PAC Fee (by Cindy K.):
Oh, that makes sense. I was amazed at the way that the Real Estate Office of the AZ Att'y Gen'l wasn't "aware" of certain laws referred to in my initial Statement of Information. (I may have posted this earlier...but just for fun, below is what I found about the transition of Sunterra to DRI - this was the time period in which we purchased). As I recall, the settlements for the lawsuits were done in such a way (at least in some cases) that Sunterra was able to avoid some actual judgments against their business practices so that others could be warned. In some of the cases below, the plantiffs came away with their monetary settlement, but Sunterra wasn't stopped from their rampant deceptive business practices. DRI has continued, but has been more blatant in their unfair practices. Hopefully there will be a lawsuit that can stop them in their tracks before other families are dragged into the Black Hole of DRI.
For those of us who found themselves in the transition between Sunterra and Diamond Resorts - there were successful lawsuits against them at that time for misrepresenting Sunterra's earnings and violating Securities and Exchange Commission rules. Then there were 3 other class action suits (I think all successful) for misrepresenting Sunterra's earnings, (Gonan v. Sunterra Corp, et al, No. 2:06-cv-0084; Kaltman v. Sunterra Corp, et al, No. 2:06-cv-00894 and Sickles v Sunterra Corp, et al, No. 2:06-cv-0877). Since Sunterra overstated their earnings and worth, potential buyers were also mislead as to the value of ownership at their properties.
From "reviewjournal.com"...The Rosen Law Firm of NY alleged that Sunterra and some officers and directors issued false and misleading financial results for the past 3 years, and the 1st quarter ending Dec. 31, 2005.
Sunterra in April announced that it terminated Grant Thornton as its independent auditor. Grant Thornton later reported that it received an email from a former employee, alleging accounting improprieties in Sunterra's European operations which should be reported, contrary to the position Sunterra took in a filing with Securities and Exchange Commission. Sunterra fired its managing director of Sunterra Euorpe and reported that financial reports for the past 3 years were inaccurate. In June, Nickolas Benson, CEO, was put in administrative leave, pending a company investigation of accounting. Chief Financial Officer Steven West resigened.
Federman and Sherwood of Oklahoma City and Brower Piven of Baltimore also announced lawsuits against Sunterra.
At the time we bought, though we asked and they denied it, they were in negotiations with Hilton (until they couldn't agree on the price for repairs in one of the Hawaiian props) as as DRI, which eventually purchased.
What is amazing is that during this same time period, as these class action/lawsuits were ongoing they doubled their sales, and added to the number of families owning!