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Timeshare king David Siegel wears down sales agents he decided not to pay

Feb 05, 2013 12:30 am

Skift Take

Whether it’s Westgate or a more reputable company like Wyndham, the reality of a timeshare rarely matches the promise of a high-pressure sales pitch — no matter which end of that pitch you’re on.

— Jason Clampet

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Sales agents who were cheated out of their commissions by a marketing group owned by self-professed timeshare king David Siegel told a judge Monday that they are tired of fighting for their pay and would like to approve a proposed settlement agreement that would give many of them less than half of what they are owed.

CFI Sales & Marketing Ltd. — the company that markets timeshare sales for Siegel’s Orlando, Fla.-based Westgate Resorts, including one along the oceanfront in Myrtle Beach — has offered to split a $500,000 payment among about 365 sales agents who filed a class-action lawsuit against the company nearly six years ago. That settlement agreement was filed late last week and presented on Monday to Judge Michael Baxley. A trial in the case had been scheduled to start Monday.

During a court hearing, Baxley said he will review the proposed settlement and schedule a hearing “as quickly as possible” to determine whether it will be approved.

Many of the sales agents who attended Monday’s hearing urged Baxley to approve the agreement, saying they need their money and are weary from the drawn-out court battle.

“It’s shameful what they’ve done, but I have renal disease and might not see the money if we have to wait another three years to get it,” said Gerardo Olivieri.

Cara Sullivan said she is “tired of fighting a very long battle.”

“If we had stolen from Mr. Siegel, we would have been put in jail,” Sullivan said. “He is stealing from us.”

A few sales agents, however, said they would rather see Siegel punished than get a paycheck.

“I’m ready to see some justice done,” said Cynthia Reilly, adding that other tourism-related businesses might be watching this case to see what they can get away with.

Judith Parker — the lead plaintiff in the case, who would get about $2,800 of the $6,000 she is owed if the settlement is approved — called the settlement offer “appalling” but told Baxley that she would “unhappily go along with the settlement” because she knows many of sales agents need the money to pay bills.

CFI has deposited $500,000 into a trust account with the Turner Padget law firm pending approval of the settlement agreement. Another hearing will be held after Baxley reviews the proposal and sales agents will again be given an opportunity to voice their feelings. Surfside Beach lawyer Gene Connell also must contact 78 sales agents who could not be notified of Monday’s hearing because their addresses have changed. Baxley approved a 20-day notice period for those sales agents, which means a final hearing could be held within a couple of months.

If the settlement is approved, sales agents will receive payments ranging from nothing — for those who were paid under a previous settlement that went into default — to about $11,000. All told, about $340,000 would go to the sales agents with the rest going to attorneys who represented them in the class-action lawsuit.

In addition to settling for less than what they are owed, the sales agents would not be allowed to say negative things about Siegel or his companies under a non-disparagement clause included in the proposed agreement. Connell said the sales agents object to the clause and want to be able to express their feelings about their former employer.

“We’re not looking to put duct tape over anybody’s mouth, but we’re looking for people to act in a mature and business-like manner,” said Richard Epstein, a lawyer representing Siegel and his companies. “This has gotten way more emotional than anyone could have imagined.”

This would be the second settlement agreement in the case. The sales agents agreed in January 2010 to accept $650,000 in payments from CFI, but Siegel’s company defaulted on the agreement after making just two payments totaling $50,000. CFI’s lawyers said during a court hearing later that year that the company had only agreed to have a judgment entered against it, but hadn’t promised to make all of the payments. Baxley then ruled that if CFI wasn’t willing to pay the debt, the sales agents could pursue payment from Siegel, other company executives and Siegel’s other businesses. The previous settlement agreement also was reached just as a trial was to begin.

“They already low-balled us with the $650,000 offer years ago, and to come back with this is just appalling,” Parker said.

The effort to bring Siegel to trial picked up steam last year after Siegel appeared on national television shows boasting about his wealth.

Connell told The Sun News in October that Siegel’s statements — including a vow to complete his 90,000-square-foot home nicknamed Versailles, dubbed the most opulent home in America — indicate the Westgate founder has plenty of money to pay his workers. In an ABC News appearance in July, for example, Siegel said that while the nation’s economic collapse forced his family to cut back on their number of servants it did not impact his wife’s caviar purchases or her taste for Gucci, Valentino and Versace.

CFI lawyer John Wilkerson III said at the time that Siegel’s personal fortune has nothing to do with debts his companies might owe.

Siegel was supposed to appear in court last year to detail his finances but the hearing was canceled at the last minute after his lawyers told Baxley that the corporate jet was broke and they could not make the trip from Florida.

Reilly, the sales agent who said she wanted to go through with a trial, said the unpaid commissions were devastating financially and led to her losing her home.

“I know what I’ve lost, while Mr. Siegel is sitting in Florida building the world’s largest house,” Reilly said.

The local sales agents were paid an hourly wage but not the commissions CFI had promised for generating sales at the Westgate resort at 415 S. Ocean Boulevard. Westgate, which was founded by Siegel in 1982, operates 27 resorts in destinations including Las Vegas, Miami, Orlando, Fla., Branson, Mo., and Gatlinburg, Tenn.

(c)2013 The Sun News (Myrtle Beach, S.C.). Distributed by MCT Information Services.

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