Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LAS VEGAS-Sunterra Corp. is no longer just looking to sell its European operations. The locally based vacation ownership company with 100 branded or affiliated resorts worldwide and an accounting problem said Thursday that in response to interest, it has decided to consider selling its North American operations as well.

For the sale of Sunterra Europe, the company previously retained Chanin Capital and says it has received interest from potential buyers. The company now says it will select an investment bank by the end of the month to assist management in the assessment and valuation for a possible sale of the entire company.

“The company expects that Chanin will provide preliminary analysis to the company regarding Sunterra Europe shortly, and the company intends to take this into account in its evaluation of the alternatives for the entire company,” the company says in a prepared statement.

In recent days, multiple law firms have filed class-action lawsuits against the company on behalf of those who purchase stock in the company between April 15, 2003 and June 22, 2006. The case is pending in the United States District Court for the District of Nevada.

The complaints, including one by the New York-based Rosen Law Firm, charge that Sunterra and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities and Exchange Act by issuing materially false and misleading financial results for the fiscal years ended December 31, 2002 to September 30, 2005 and the first quarter ended December 31, 2005.

On March 27, 2006, Sunterra announced that it had terminated Grant Thornton as its independent auditor. On April 10, 2006, Grant Thornton notified the SEC by letter that it disagreed with Sunterra’s statements concerning Grant Thornton’s termination.

Specifically Grant Thornton asserted that an email it had received from a former employee alleging accounting improprieties in Sunterra’s European operations was a reportable event, contrary to the representation that Sunterra had made to the SEC on March 27th. On May 2, 2006, Sunterra terminated its managing director of Sunterra Europe. On May 3, 2006 Sunterra announced that its financial results for the fiscal years ended December 31, 2002 to September 30, 2005 and the fiscal quarter ended December 31, 2005 contained material inaccuracies and should no longer be relied upon.

On June 22, 2006, Sunterra announced that it had placed its CEO Nicholas J. Benson on administrative leave pending the completion of its investigation into the company’s accounting practices and the allegations by the former employee. That same day, the Sunterra announced that its CFO Steven West had resigned.

On July 6, 2006, the Sunterra’s stock was de-listed from the Nasdaq. Prior to the March 27 announcement, Sunterra’s share price was in the mid-$14 range. The share price it a 52-week low of $6.86 on June 23 and in noontime trading Thursday stood at $11, up 8% on the day.

On Wednesday, Sunterra’s Board of appointed Keith Maib to serve as the company’s COO and EVP. Maib will assist James Weissenborn, interim president and CEO, with day-to-day operations and other company matters, according to the statement.

The company also appointed Derek Kanoa, currently VP of Western US sales, to serve as SVP of sales. He replaces Andrew Gennuso, who resigned effective July 21, 2006, in order to pursue other opportunities within the timeshare industry.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.