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Golf News: - Posted 15th October 1998

Golden Bear stockholders file suit

Associated Press

West Palm Beach, Fla. - Jack Nicklaus' Golden Bear Golf Inc. is facing more legal trouble.

United States Fidelity and Guaranty Co., based in Baltimore, sued Golden Bear and its subsidiary, Paragon Construction International, claiming the companies defaulted on millions of dollars of bonds on projects, including Donald Trump's golf resort in West Palm Beach.

North Palm Beach-based Golden Bear has failed to live up to its bond agreement and is withholding financial documents, according to the lawsuit filed Wednesday in Palm Beach County Circuit Court.

Contractors already have tried to collect more than $960,000 from USF&G, which Paragon says it cannot pay for unfinished work at the Trump International Golf Club, the lawsuit claimed.

Bruce King, a lawyer for USF&G, and Steve Winslett of Golden Bear did not immediately return calls for comment Thursday.

Shareholders of Golden Bear sued the company in July, accusing former employees of falsifying Paragon's records to hide nearly $22 million in losses.

Golden Bear was forced to restate its losses. Originally, it had reported a net loss of $2.9 million, or 53 cents a share, on revenue of $67.7 million. The restated loss will be $24.7 million, or $4.49 a share.

Paragon lost several big deals due to disagreements and delays, including the Trump golf club in July. Paragon president John Boyd and three other executives left the company in April before the review began.

Golden Bear's stock, JACK, was delisted by the Nasdaq stock market in August after the company failed to meet capital requirements.