Former Sunterra Exec. defendant in class action

Started by Newshound, April 26, 2006, 17:35:08

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Newshound

A man who hopes to develop an 18-acre parcel in Stateline was sued by shareholders of his former time-share company, Sunterra Corp., in 2000.

The class action alleged top executives cooked their books by $40 million and issued false financial statements to make the company look profitable, so they could sell it to a larger company.

The suit was settled for $4.5 million last May. Settlement papers state the defendants, including Steven Kenninger, denied all liability and only chose to settle to avoid expensive litigation.

When contacted via e-mail last week, Kenninger referred comments to his lawyer Leif Reid. Reid referred comments on the class action to Bob McKirgan, who represented Kenninger in the lawsuit. McKirgan could not be contacted Tuesday because he was on an airplane.

Kenninger was the chief operating officer of Sunterra. He was co-founder, president and co-chairman of Signature, which changed its name to Sunterra in 1998.

Sunterra is formerly Argosy/ KOAR, which owned Tahoe Seasons Resort and Tahoe Beach and Ski Resort.

The class action alleged the company's top executives committed accounting fraud by overstating their financial situation.

Accounting irregularities were discovered during a routine audit as the company was sealing a merger deal, according to the original complaint. The deal was dropped after the audit and Sunterra declared bankruptcy.

Once under new leadership, Sunterra disclosed that all financial statements issued in 1999 or before should not be relied upon, and said it was suing its former managers, directors, auditors and IT consultants, according to the complaint.

Kenninger was named 41 times in the 143-page complaint. The case number is 6:00-cv-79-Orl-28B. The settlement was largely paid by insurance companies and accounting firm Arthur Andersen, which was also a defendant, according to the settlement agreement.

On Jan. 20, 2000, the company announced its fourth quarter earnings would come in far below analysts' predictions and that its balance sheet was off by between $38 million and $45 million, according to the complaint. Stock plummeted from $13.50 in late 1999 to eight cents a share in October 2000 on the New York Stock Exchange.


Sunterra is the biggest SCAM in the Industry, Unfortunately they have found their way to the USA, along with "Tricky" Nick Benson.
The way these people allow their sales people to represent their SUNTERRA POINTS is actually ILLEGAL in the U.S. It is just a matter of time until the folks here figure it out. They also hired some of the biggest "CON ARTISTS" available to help in their SCAM.
Derek"The Lyin Hawaiian" Kanoa, "Dandy" Andy Gennuso, etc. etc. all living that LAS Vegas lifestyle that so perfectly portrays their value system. I hope the people here in the USA have the brains to figure these clowns out as quickly as you folks did.

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