HARTFORD, Conn., July 19, 2006 (PRIMEZONE) -- The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the District of Nevada on behalf of all persons who purchased or otherwise acquired the publicly traded securities of Sunterra Corporation ("Sunterra" or the "Company") (Pink Sheets:SNRR) between August 14, 2003 and May 17, 2006, inclusive (the "Class Period").
The Complaint alleges that defendants violated federal securities laws by issuing a series of materially false statements regarding the Company's growth. Specifically, defendants concealed the following: (i) Sunterra's reported expenses were materially understated; (ii) the Company's "record" financial results were the result of defendants' accounting manipulations; (iii) Sunterra's reported net income was grossly inflated; and (iv) as a result, Sunterra's projections for fiscal 2006 were grossly inflated and Sunterra was in technical default on its subordinated note agreement.
On May 3, 2006, Sunterra announced that pursuant to an internal investigation, the Company determined that it had underpaid withholding taxes in Spain on wages paid to Sunterra Europe employees and that it had voluntarily made a payment of $3.1 million to Spanish tax authorities. Then on May 17, 2006, Sunterra announced that it had received a letter from The Nasdaq Stock Market on May 15, 2006, indicating that, as a result of the Company not timely filing the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, Sunterra was not in compliance with Nasdaq's filing requirement, and that unless the Company requested a hearing, the Company's securities would be delisted from The Nasdaq National Market. As the above revelations seeped into the market, Sunterra stock fell 34% from its Class Period high of $16.72 per share.
If you are a member of the class, you may, no later than September 11, 2006, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz & Nobel has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail at sn06106@aol.com, or visit our website: www.snlaw.net.