Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.
Hilton Grand Vacations Inc. (Hilton) and its board of directors have been hit with a lawsuit for allegedly lying to shareholders and misleading them in the company’s acquisition of Diamond Resorts.
The lawsuit was filed on May 7 in New York by lead Plaintiff Marina Clough, who alleges that the company and its board have violated the Securities Exchange Act.
In March, Hilton announced that it had entered into a definitive agreement to acquire Diamond Resorts International, Inc. from funds managed by affiliates of Apollo and Reverence Capital Partners, and other Diamond stockholders, in a stock-based transaction.
According to the lawsuit, a proxy statement recommended that Hilton shareholders vote in favor of the proposed transaction, that would see Apollo Funds and other Diamond stockholders receive 34.5 million shares of Hilton common stock to a value of $1.4 billion.
Upon transaction close, existing Hilton shareholders will own approximately 72 percent of the combined company and the Apollo Funds will own approximately 28 percent of the combined company, according to the lawsuit.
However, the claim states that the proxy statement omits and misrepresents material information concerning Hilton’s and Diamond’s financial projections; the financial analyses performed by Hilton’s financial advisor, Bank of America Securities, Inc. in connection with its fairness opinion; and potential conflicts of interest involving Bank of America (BOA).
The claim says that BOA failed to disclose the true earnings of Diamond Resorts and the true revenue and cost projections, and it also failed to disclose possible conflicts of interest.
“With respect to the [Hilton Grand Vacations] HGV Forecasts, Adjusted Diamond Forecasts, and HGV Pro Forma Forecasts for Combined Company, the Proxy Statement fails to disclose: (1) all line items underlying (i) Total Revenues (Excluding Cost Reimbursements), (ii) Adjusted EBITDA, and (iii) Unlevered Free Cash Flow; (2) Hilton’s, Diamond’s, and the pro forma combined company’s net income projections;1 and (3) a reconciliation of all non-GAAP to GAAP metrics,” the claim states.
According to the lawsuit, disclosure of that information is material because it would provide the company’s shareholders with a basis to project the future financial performance of the Hilton and Diamond Resorts, and would allow shareholders to better understand the financial analyses performed by the company’s financial advisor in support of its fairness opinion.
“Shareholders cannot hope to replicate management’s inside view of the future prospects of the Company.”
The deal is expected to close in the summer of 2021. In the event the transaction is consummated, Clough may seek to recover damages resulting from Hilton’s misconduct, the claim states.
Clough is suing for violations of the Securities Exchange Act and seeks an order of enjoinment, possible damages, legal fees, and a jury trial.
Hilton isn’t the only company facing legal action for alleged violations of the Securities Exchange Act. Recently, shareholders of online luxury-goods marketplace The RealReal filed a class action lawsuit alleging that members of the company’s executive team, board of directors, and underwriting banks lied to shareholders, artificially inflating share prices.
Do you hold shares in a company that you think has violated the Securities Exchange Act? Let us know in the comments section!
Clough is represented by Daniel Sadeh and Zachary Halper of Halper Sadeh LLP.
The Hilton Securities Exchange Act Violations Lawsuit is Clough. v. Hilton Grand Vacations Inc., et al., Case No 1:21-cv-02583, in the United States District Court Eastern District of New York.
Don’t Miss Out!
Check out our list of Class Action Lawsuits and Class Action Settlements you may qualify to join!
Read About More Class Action Lawsuits & Class Action Settlements:
- FibroGen Lied About Drug Trial Results, Artificially Inflating Share Prices, Class Action Claims
- The RealReal Lied About its Authentication Process, Artificially Inflating Stock Prices, Class Action Claims
- Electric Vehicle Battery-Maker Romeo Artificially Inflated Share Prices, Class Action Claims
- Grubhub Investor Files Class Action Lawsuit Over Just Eat Merger
57 thoughts onHilton and Its Board Made False Statements to Shareholders About Diamond Resorts Acquisition, Lawsuit Claims
I just read through the many comments. I love using timeshares to travel – BUT I HATE the high pressure sales and always getting bogus information. The ‘Owner Updates” are high pressure sales. I will was told today my yearly fees for Diamond will increase dramatically – up to 25% and I will have a hard time booking Resorts now that Hilton has bought Diamond. I am very upset and want more information on the Lawsuit.
My co-owner and I bought into a 10 yr timeshare with Diamond Resorts in Dec of 2019. Now we find we cannot use points alone to book a stay – everything costs money as well. Smaller hotel/motel bookings used to be available with points only, now we are told we can only reserve hotel rooms that cost a minimum of $500 to use points and money. We want to get out as this is not what we signed up for.
Hello, we are Diamond owners and bought in march of 2021. No one explained that this acquisition was happening until a few months after we purchased. No one explained that we would have to buy into Hilton to avoid having to pay more for maintenance fees and stays at the resorts
is
We so agree with you. We are Centum Diamond owners and were just told if we will loose 21 of our top Doamond resorts if we do not buy into the HGV Max. We have been members since 1997, beginning with Poipu Resort, Embassy Resorts. Now with 100,000 points we are loosing all the money we dumped into this money pit.
I am a current employee, this whole company is fraudulent and i can provide information, if a lawyer sees this please contact me i am in FL phone is 407 621 1078. They train us to scam people and i have proof
Purchased HGVC at Tuscany Village in Orlando and was told our home week would always be around 6/9. Depending on when that week started because we purchased in 6 of 2004 every other year. Went 9/22 to a Hilton presentation in Myrtle Beach SC ans was told my home week was in May. Called HGVC 12/22 asking when my home week was and was told “you really don’t have a hone week, you have a Gold week which means you can book during any Gold week on the calendar. Never been told this before and had paid to change my home week to a week later in June so I could bring the grandbaby. This company is full of BS and my mission now is to get everyone on board who was lied to when they purchased their timeshare to file charges. Even had somone call this week wanting to rent our timeshare and when we told them it was HGVC Tuscany, reply no thank you, we can’t deal with them. I JUST WANT OUT.
Any information you have will be appreciated. We bought into HGVC on April 3,2022. We were told at the time that we would no longer be responsible for Diamond Resorts for HOA fees as of Dec 31,2024. Diamond Resorts is already paid off. Yet Diamond Resorts billed us for 2023. It appears that we are paying for two resorts even though they have merged. We believed that we would only be paying for HGVC. If we have been misled and we have to keep HGVC or cancel Them and Diamond Resorts which already own and paid off, we want a way out. My wife took notes. We do not want to pay for two timeshares.
We have the same issue two HOA fees with the same company. When we were told we would only have one.
We ware platinum members of Diamond Resorts and have been lied to many, many times by high pressure salesmen over the years and now HGVC is repeating it again.
Disappointed that Diamond is deemed 2nd class and HGV is “upper scale” Booking vacations will be more difficult as HGV has priority over diamond resort owners.
I would like to join as we have been lied too, intimidated and can not even use the program. I registered online but always get an error when trying to use their website.
We were promised things they dud nit deliver. Told we can use the program but when booking told we can’t until next year.
Lies, lies, lies
My brother and I have all the same issues! They even sold my father a contract as a single man even though he was married to my mother! When he died, probate was crazy expensive!!
Same here! I am interested joining this law suit. Diamond Resorts continues to lie about the services available. We came to their new member orientation but it was another tactic to sell us more, 15k more. We have been calling Hilton and nobody answer us.
Is there a class action lawsuit going on right now against Hilton? They are just as bad as Diamond, if not worst! We went to a high-pressure meeting yesterday; the salesman Trotter, told us so many lies, I was incredulous that these people are able to function like this. Diamond got us last time; however, we caught him in his lies! Anytime you hear them tell you not to mention something to the person who is doing the closing. Believe me, it is a con; they use this tactic every time. It sounds too good to be true, but it is. Hilton is using the same disgusting people that we’re on board with Diamond.
Just attended our first review under Hilton and we are simply looking for a way out!
We have experienced the same as all. Super frustrating. I appreciate all the comments, but it’s not clear who to contact to join a class action suit. Am I missing something in this website? Otherwise it’s just a lot of people asking for help.