Luxury travel company Abercrombie & Kent has been sued for allegedly misleading investors into spending millions of dollars to join high-end vacation clubs that were not run by the tour group as they had believed.
The plaintiffs claim they lost their investments - $100,000 (EUR 72,875) to $1.3 million (EUR 0.95 million) each - after the operator of the clubs went bankrupt. They said they would not have invested in the clubs had they known they were not run and operated by Abercrombie & Kent, the lawsuit said.
"The reason most of my clients bought into this club was because A&K has an excellent reputation, they assumed A&K was managing it," said plaintiffs attorney Brian Kabateck. "These people were misled and they've lost their money."
An after-hours call to Oak Brook, Ill-based Abercrombie & Kent was not immediately returned Thursday.
The lawsuit said Abercrombie & Kent allowed another travel company, Complete Retreats, to use its brand names in connection with the marketing of Complete Retreats clubs.
The use of the Abercrombie & Kent name in promotional materials misled investors, the lawsuit says, into believing the clubs were operated by the luxury travel company.
The lawsuit, filed Thursday in Los Angeles Superior Court, claims intentional misrepresentation, negligence and violation of the California unfair competition law and seeks an unspecified amount in damages.
Membership in the travel clubs would have allowed participants access to luxury resort residences, yachts, private jets, luxury cars and other amenities, the lawsuit says.