A major beneficial shareholder in Bermuda jewellery retailer, Astwood-Dickinson Co., is being sued by one of the largest jewellery distributors in the Caribbean.

Named in the action is Stephen G.E. Crane, the CEO and major shareholder of US Virgin Islands-based Colombian Emeralds International, which 18 months ago took a 40 percent stake in Astwood-Dickinson.

Mr. Crane is also president and CEO of another Caribbean-based company, Destination Retail Holdings Corp., a closely-held firm that operates a number of retail organisations throughout the Caribbean and Alaska.

They include Colombian Emeralds, Diamonds in Paradise, Parfum de Paris, Oasis, Jeweler's Warehouse and Island Galleria which have competed in the luxury duty-free markets for some 30 years.

Destination and certain affiliates contractually agreed at the beginning of the year to buy publicly-traded Little Switzerland Inc., also based in St.

Thomas, Virgin Islands, for $68.6 million.

Little Switzerland, a jewellery and crystal retailer, operates 24 stores on 10 Caribbean islands and three stores in Alaska cruise ship ports.

This week, Little Switzerland said they were suing Destination, Mr. Crane and certain related entities for failing to raise the money needed to make the purchase.

Little Switzerland wants the US Federal Court for the District of Delaware to award unspecified damages in part to compensate for money spent on the planned merger.

In February, Little Switzerland's board approved the company's sale.

Shareholders on May 8 approved the transaction, which would have combined the tourist shop chains.

But at least three days before, Destination advised that its financing agreement -- the letters of commitment they had obtained from DLJ Bridge Finance Inc. and Donaldson, Lufkin & Jenrette Inc. -- had expired on April 30.

Colombian Emeralds legal fight The news sent Little Switzerland shares plummeting.

They unsuccessfully sought more information from Destination, which requested a 90-day extension to obtain the financing to consummate the merger. Little Switzerland was only prepared to wait until June 5, having been waiting to close the merger since May 8.

They publicly complained on May 21 that Destination had refused to meet with them to show their books and explain their plan to get financing.

In a suit filed last week in US District Court in Wilmington, Delaware, Little Switzerland claimed Freeport, Bahamas-based Destination Retail had broken the agreement by failing to arrange financing. Little Switzerland ended the acquisition agreement last Tuesday.

Chairman of Little Switzerland C. William Carey said in a prepared statement: "Though we're disappointed to have to terminate, it has become apparent to us that Destination doesn't have the financing and isn't going to get it.

"Since announcing the merger agreement with Destination, we have suffered the loss of certain key managers as well as adverse changes to certain of our vendor relationships. We are now compelled to protect the considerable assets of the company we have today, including personnel and vendor relationships.'' Mr. Carey said: "The Board of directors believes that Little Switzerland has been irreparably harmed by Destination's inability to honour its contractual commitments under the merger agreement and has determined that the additional delay associated with continuing the process with Destination would entail considerable risk and cause additional harm to Little Switzerland's business.

"Despite Little Switzerland's numerous requests, Destination has consistently refused to provide Little Switzerland with any type of security or other consideration in exchange for an extension or to reimburse Little Switzerland for its expenses in connection with proceeding with the merger.'' Mr. Crane responded in his prepared statement: "I am disappointed that Little Switzerland took such precipitous action and also chose to misrepresent the ongoing discussions between our companies in their press release.

"As Little Switzerland knows from our conversations, Destination Retail has been actively continuing discussions to complete the financing necessary to consummate the merger and remains keenly interested in concluding a transaction that makes sound business sense for both companies.'' Mr. Crane added: "We hope that Little Switzerland's board of directors will reconsider its wasteful and destructive litigation strategy, which can only serve to impede Destination Retail's efforts to complete its financing for the merger.

"We encourage the board to re-open productive discussions with destination Retail for the benefit of both companies and Little Switzerland's shareholders.''