Westgate suit moves ahead

CONWAY -- An Horry County judge on Tuesday gave about 300 time share sales agents the right to go after Westgate Resorts founder David Siegel and other company executives in an attempt to collect past-due pay totaling $600,000.

Judge Michael Baxley said the Westgate executives and related corporations can be added to a list of parties with potential liability for paying the debt because CFI Sales & Marketing Ltd., the original defendant in the case, defaulted on a settlement agreement reached in January to pay the employees.

Baxley also questioned whether CFI - the Orlando, Fla.-based Westgate subsidiary that sells time shares in Myrtle Beach and elsewhere - had acted in bad faith when it agreed to the January settlement, which ended a class action lawsuit against the company.

Baxley said he will consider sanctioning CFI for its conduct after its lawyer, Richard Epstein, said Tuesday that the company never actually promised to pay the money.

"All CFI has promised to do is to allow a judgment to be entered against them," Epstein said. "There has never been a promise to pay. We have a final judgment. This case is over."

Baxley said he disagrees and would not have used "substantial judicial resources" working with lawyers toward a settlement agreement if he had known that CFI had no intention of paying the workers.

Baxley said he will rule on whether sanctions are warranted at a later date.

Some former CFI workers this month picketed the local Westgate resort at 415 S. Ocean Blvd. in Myrtle Beach. Those protests are scheduled to run through the Labor Day holiday.

Judith Parker, a former CFI employee who is suing the company, said she is happy with Tuesday's ruling but doesn't believe she ever will see the $6,000 she is owed in sales commissions.

"They're going to pull out every dirty trick in the book to keep from paying," she said.

Epstein said CFI is "a company that is operating in a troubled economic climate" and does not have money to pay the debt.

Surfside Beach lawyer Gene Connell, who represents Parker and the other workers, said CFI has plenty of money and continues to operate in Myrtle Beach and elsewhere.

"The only people they have not paid are the workers," he said.

The time share sales agents were paid an hourly wage and were supposed to receive a commission on any sales they generated. The workers are suing over unpaid commissions.

CFI in January agreed to pay $650,000 in past-due commissions to the workers within 180 days. CFI made payments of $25,000 apiece in February and March but missed a July 14 deadline to pay the balance.

Connell said Siegel, Westgate and others are hiding behind CFI's corporate structure to avoid paying the debt.

Baxley's ruling allows Connell to "pierce the corporate veil" and pursue the individuals and related companies behind the corporate structure.

"All of these are an amalgamation of the same corporation," Connell said. "It's a shell game they are playing to protect themselves against a judgment."

Siegel has described Westgate as being the largest privately held time share developer in the world. Founded in 1970, the company owns 28 resorts in nine states.

Siegel's hands-on management style has been documented in interviews in which the executive said he "reviews every expense, no matter how small."

"I am a dictator, I'm the last word on everything," Siegel told The Orlando Sentinel newspaper last year.

The national real estate and economic collapse has taken a toll on Westgate, and nearly half of its once 11,000 workers have been laid off in the past two years. A judge also issued a permanent injunction against the company last year for violating the federal do-not-call legislation regulating telemarketers.

Despite the company's troubles, Connell said Siegel and Westgate have assets that could pay off the $600,000 debt.

For example, Siegel is trying to sell his 90,000-square-foot, 13-bedroom mansion in Orlando for $75 million. The home - complete with bowling alley, two-story movie theater and three swimming pools - is nicknamed "Versailles" after the French palace that inspired it, according to marketing materials.