Zwerling, Schachter & Zwerling, LLP Filing Securities Class Action Against Sunterra

NEW YORK, July 27 /PRNewswire/ -- Zwerling, Schachter & Zwerling, LLP ("Zwerling Schachter") has filed a class action lawsuit in the United States District Court for the District of Nevada on behalf of all persons and entities who purchased or otherwise acquired the common stock of Sunterra Corporation ("Sunterra" or the "Company") (Other OTC: SNRR.PK - News) during the period from April 15, 2003 through June 22, 2006 (the "Class Period").

 The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by issuing materially false and misleading statements during the Class Period which caused Sunterra's common stock to trade at artificially inflated prices. These statements were allegedly materially false and misleading when made because defendants failed to disclose that: (a) the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (b) the Company's earnings had been overstated and expenses understated because of the underpayment of withholding taxes in Spain; (c) the Company lacked adequate internal controls and was therefore unable to report accurate financial results or ascertain the true financial condition of Sunterra; (d) defendants had issued false and misleading financial projections to investors which the Company could only achieve by overstating its earnings; and (e) that as a result, Sunterra's net income and financial results were materially misstated during the Class Period.

On May 3, 2006, Sunterra announced that the Company underpaid withholding taxes in Spain on wages paid to employees of Sunterra Europe. Sunterra made a payment of $3.1 million to Spanish tax authorities. The Company also admitted that Sunterra's audited financial results for the fiscal years and related interim periods from December 31, 2002 through December 31, 2005 and related financial information in the Company's periodic filings with the SEC would be restated and should no longer be relied upon by investors. Read more at yahoo.com/prnews