# Sunterra Finalizes Tax Liabilities Related to Its European Subsidiary



## Spence (Mar 6, 2007)

Recent News release.


> LAS VEGAS, NV, Mar 06, 2007 (MARKET WIRE via COMTEX News Network) -- Sunterra Corporation (PINKSHEETS: SNRR) today announced that it has concluded its analysis of unpaid withholding taxes, income taxes and value-added taxes related to transactions conducted by its European subsidiary during calendar years 2002 through 2006. As a result, the company will voluntarily pay approximately $3 million to the European tax authorities in the next several weeks and has established a reserve for probable tax liabilities of approximately $6.8 million. Therefore, the total amount of taxes to be paid and additional reserve amounts to approximately $9.8 million.
> Sunterra previously disclosed that its European operations underwithheld certain employment-related taxes in Spain. The $3 million of payments plus the $6.8 million reserve is in addition to the $4 million voluntarily paid to Spanish tax authorities in May 2006. The company is preparing to make payments of $3 million to European tax authorities for unpaid withholding taxes, income taxes and value-added taxes and estimates that it will be required to pay $800,000 in interest and surcharges related to this payment. The $800,000 estimate is included in the $9.8 million total.
> 
> As previously disclosed, the company continues to assess a number of issues generally confined to compliance, deferred maintenance and resort licensing in Europe. Additionally, the company is reviewing the terms under which certain European properties were transferred into a European trust. Depending upon the results of this review, the company may be required to account for sale of certain trust points as operating leases. These issues could have a material adverse effect on Sunterra Europe. As previously announced, Sunterra Europe will be reflected as a discontinued operation in the company's financial statements for the fiscal year ended September 30, 2006, and the company has concluded that its investment in Sunterra Europe will be substantially impaired.
> ...


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## Bill4728 (Mar 12, 2007)

As seen in another thread, Diamond bought all of Sunterra including Sunterra Europe.  I wonder if this ( Clearing the tax liabilities) was done to clear the way for Diamond to buy the whole of Sunterra?


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