MYRTLE BEACH — David Siegel, a timeshare mogul who has boasted on national television of his wealth and plans to build America’s most opulent home, might have to explain to a judge why he shouldn’t have to pay past-due commissions owed to hundreds of area workers who sold units at his Westgate Resorts property along Ocean Boulevard here.
Gene Connell, a Surfside Beach lawyer who represents the workers, has filed court documents asking Judge Michael Baxley to force Siegel to appear in a South Carolina court and answer questions about his company’s finances and a settlement agreement a Westgate subsidiary reached with the workers in 2010. Baxley has not ruled on the request.
The agreement called for CFI Sales & Marketing Ltd. – the Orlando, Fla.-based company that sells Westgate’s timeshares in Myrtle Beach and elsewhere – to pay $650,000 to about 300 workers. CFI agreed to have a judgment entered against it and paid the workers $50,000 before defaulting on the agreement.
Connell says Siegel’s recent statements on national television news shows – including a vow to complete his 90,000-square-foot home, nicknamed Versailles – 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 Siegel’s personal fortune has nothing to do with debts his companies might owe.
“Whether David Siegel, against whom no judgment has been entered in this case, has the ability to pay the amount of the judgment is legally irrelevant,” Wilkerson said in court papers filed last month. “No court – whether this one or any other – has ever found Mr. Siegel to be liable for this debt.”
Siegel, Westgate’s president and chief operating officer, recently has sent mixed signals about his company’s financial health. In a news release last month, he said: “Westgate is operating at the highest profit levels in the history of the company.” Westgate raised more than $440 million this year to pay down debt and provide extra liquidity for project development and acquisitions.
However, in an email last month to Westgate employees, Siegel said the economic climate remains so shaky that he will start firing employees if President Barack Obama is re-elected.
“If that happens, you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about,” Siegel said in the email.
Wilkerson said Siegel’s money is irrelevant because CFI is the company that hired workers to sell the Myrtle Beach resort.
“[CFI] has not paid the judgment for the simplest and most understandable of reasons: It does not have the money to do so,” Wilkerson said in court documents.
The local sales agents were paid an hourly wage and were supposed to receive a commission on any timeshare sales they generated at Westgate’s resort at 415 S. Ocean Boulevard. The workers are suing Siegel, CFI and other Westgate companies over unpaid commissions they were supposed to receive when the timeshares were sold during the real estate boom.
CFI agreed to pay $650,000 to the workers in January 2010, but only made two payments of $25,000 apiece. A CFI lawyer said at the time that the company never actually agreed to pay the workers, but had only agreed to have a judgment entered against it at the local courthouse.
Baxley in 2010 gave Connell permission to pursue Siegel and other Westgate executives for the money, and the lawsuit – initially filed in 2007 – has stalled in court since then.
Siegel – a billionaire who once told his hometown The Orlando (Fla.) Sentinel newspaper that he is “a dictator . . . I’m the last word on everything” – has repeatedly taken to the media in recent months to dispute claims made in an unflattering documentary called “The Queen of Versailles,” which documents construction of the 30-bathroom, 10-kitchen home he and his wife are building.
Siegel is suing the filmmaker for defamation and said he doesn’t like the documentary’s riches-to-rags storyline, telling ABC News that “it never became rags.” He said the film was contrived to appeal to low- and middle-income viewers who like to see the wealthy taken down a notch or two.
“We’re the 1 percent, and the 99 percent hate us or are jealous or whatever,” he told The Orlando Sentinel in February.
Connell has said in court documents that such statements are evidence that Westgate should be “held in contempt for its failure to pay a judgment owed to its employees for back wages.”
Baxley held a court hearing earlier this month in Bennettsville to determine whether Siegel and Westgate should be sanctioned for failing to pay the judgment. Baxley took that issue under advisement. A previous hearing on that matter had to be rescheduled because the Westgate private jet had mechanical problems that forced the company’s lawyers to miss the court date.
A trial to determine whether Siegel can be held personally liable for the debt to area Westgate sales agents is tentatively scheduled for early February at the Horry County Government and Justice Center in Conway.
Contact DAVID WREN at 626-0281.