Vestin sues investor, seeks more than $1 million

Vestin Group and affiliated real estate mortgage loan funds have filed a lawsuit in federal court in San Diego, seeking more than $1 million from an activist investor.

Mike Shustek, chief executive and chairman of Vestin Group, filed a lawsuit against Kenneth Klaas and 50 other defendants whose names are not known, over alleged misuse of a list of investors.

Attempts to contact Klaas failed.

The lawsuit, which was filed Oct. 30, says that Vestin provided Klaas a list of investors so he could contact them and seek signatures for a petition related to a shareholder vote on converting two mortgage loan funds, Vestin Fund I and Vestin Fund II, to real estate investment trusts. Klaas said he wanted the investor signatures to petition to dissolve Vestin Fund II, according to Vestin.

Klaas signed an agreement promising not to use the investor names for another purposes, according to the lawsuit, but Klaas used the list as barter with Thomas Frost of Shustak & Partners.

Frost was said to be unavailable Monday.

The lawsuit also said Klaas used the list to contact investors interested in participating in two “frivolous lawsuits” against the plaintiffs — Shustek, Vestin Fund I and Vestin Fund II.

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