A
group of 96 individuals has filed a lawsuit against upscale tour
operator Abercrombie & Kent, with each plaintiff claiming a
loss of upwards of hundreds of thousands of dollars as a result of
a fraudulent marketing scheme.
The individuals,
represented by Kabateck Brown Kellner LLP of Los Angeles and
Walker, Hamilton & White of San Francisco, claim they paid
membership deposits ranging from $100,000 to $1.3 million to join
A&K-branded Destination Clubs.
According to the
claim, A&K had entered into marketing agreements with a group
of companies called Complete Retreats and Preferred Retreats,
founded in 1999 by Rob McGrath.
The group of
companies paid a licensing fee to brand the destination clubs with
names such as Private Retreats by Abercrombie & Kent, and
Distinctive Retreats by Abercrombie & Kent.
The suit contends
that "potential members of the clubs reasonably thought that all
the A&K-labeled clubs were owned and operated by A&K or
were divisions of A&K," due to the extensive use of the A&K
name in the marketing materials.
Membership in the
destination clubs promised year-round, unlimited access to luxury
resort residences, apartments, hotel suites, private jets and
A&K safaris and tours.
According to the
claim, upon placing their deposits members were issued membership
bonds guaranteed to be 100% redeemable within 18 months of making
the deposit.
The plaintiffs
claim, however, that when Complete Retreats and Preferred Retreats
(now known as Tanner & Haley), which owned and operated the
A&K-branded destination clubs, filed for bankruptcy on July 24,
2006, they not only lost their privileges as members but all their
deposits.
Pamela Lassers, a
spokeswoman for A&K, told Travel Weekly: "Abercrombie &
Kent's relationship with Preferred Retreats and Distinctive
Retreats did not extend beyond licensing agreements, which were
terminated over two years ago, on June 30, 2005. Under the terms of
those licensing agreements, Abercrombie & Kent required that
Preferred Retreats and Distinctive Retreats inform all prospective
members that Abercrombie & Kent was not involved in the
management nor the operations of the Preferred Retreats or
Distinctive Retreats clubs."
The suit was filed
in Superior Court for the State of California, County of Los
Angeles Central District against A&K as well as two A&K
executives: Geoffrey Kent, chairman and CEO, and Jorie Butler Kent,
vice chairman.
It was filed as a
mass action, which allows the plaintiffs to be listed individually,
as opposed to a class action.
Because each
plaintiff has slightly different circumstances, ranging from their
deposit amounts to the terms of their club membership, a mass
action allows them to file the same consolidated complaint against
the same defendant, but with the opportunity to claim varying
awards, according to Reza Sina, an associate at Kabateck Brown
Kellner.
According to
Kabateck Brown Kellner, the complaint could be tried as late as
2008.
Separately, on May
9, all real estate assets of the now-defunct Tanner & Haley
were acquired by Ultimate Resort LLC, a private destination
club.
According to
Ultimate Resort, more than 650 former members of Tanner & Haley
agreed to become members in Ultimate Resort destination clubs.
To
contact reporter Michelle Baran, send e-mail to [email protected].