Legal dispute erupts at big LV timeshare

Preferred Equities Corp., a manager and member of Grand Flamingo Towers Owners Association, sued member Bruce Burgmann and its former vice president, alleging they conspired to take over the management of the association's Grand Flamingo Towers.

Preferred Equities owns some interest in the Grand Flamingo Towers Owners Association, which in turn owns the Grand Flamingo Towers. The Towers, located at 100 Winnick Avenue behind the Flamingo Hilton hotel-casino, are not related to that hotel-casino.

In a Clark County District Court suit, Preferred Equities, which develops, markets, finances and manages timeshare properties nationwide, said its former vice president, James Bennett, allegedly tried to terminate its management agreement with the association by disseminating correspondence that allege the company misappropriated funds from the association.

The suit said the association gave Preferred Equities on Jan. 1, 1999, an exclusive right to manage, operate and service Grand Flamingo Towers, in which the company owned about 2,000 timeshare weeks.

"Bennett claimed our company appropriated Association funds. That was looked into by the Nevada Department of Real Estate, but they found no evidence of wrongdoing, and neither did the year-end independent audits," Jon Joseph, Preferred Equities' general counsel said.

"There were a number of shortfalls in the association's operating funds because of the timing when homeowners assessments, that is, annual maintenance fees are collected," Joseph said. "Preferred Equities never misappropriated funds from the association. In fact, we advanced money to them through interest-free loans."

Preferred Equities said the defendants tried to disrupt its ability to continue to get annual renewals of the management agreement at favorable terms, as well as its relationship with several owners of the Grand Flamingo Towers' units.

The suit said Burgmann and Bennett, who resigned in December 1998, allegedly held unauthorized association meetings and challenged the election of officers and directors in June.

Burgmann declined to comment on the allegations. Bennett could not be reached for comment.

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