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Golden Bear Inc could go back to private ownership

Jack Nicklaus' Golden Bear Golf Inc. has announced a proposed settlement of a class-action lawsuit that could result in the golfing great buying out his shareholders and taking the company private.

If the settlement is approved, the company would pay 75 cents for each of the 2.7 million shares now held publicly. Shareholders who lost money would be given an additional $3.5 million total.

"I think this makes a lot of sense," said Michael Pucillo, an attorney for the shareholders who brought the suit. "You look at this company and you ask yourself why it's a public company."

After the announcement Thursday, the company's shares rose 14 percent to close at 50 cents.

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.

Shareholders of Golden Bear accused former employees of falsifying Paragon's records to hide nearly $22 million in losses.

The lawsuit claimed North Palm Beach-based Golden Bear failed to live up to its bond agreement and withheld financial documents.

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 revenues of $67.7 million. The restated loss was closer to $24.7 million, or $4.49 a share.

The proposed settlement would benefit all shareholders who had lost money on Golden Bear shares between its public offering in 1996 and the announcement of restated earnings on July 27, 1998.

It was still unclear how many shareholders would be affected by the settlement, which will be paid by the company's insurer and auditors, Pucillo said.