Property owners sue Credit Suisse for $24bn
Credit Suisse Group has been sued by property owners in four luxury ski and golf resorts, saying the Swiss bank concocted a loan scheme to defraud them and ultimately take over the properties.
The lawsuit filed on Sunday in federal court in Boise, Idaho, seeks $24 billion (Dh88bn) of damages against Credit Suisse and commercial real estate firm Cushman and Wakefield, and class-action status for more than 3,000 investors who bought land or homes.
The alleged losses relate to Yellowstone Club, a Montana ski resort whose members have included Microsoft Corp Chairman Bill Gates, as well as to Lake Las Vegas resort in southern Nevada, the Tamarack resort in central Idaho and Ginn sur Mer on Grand Bahama Island in the Bahamas. Lake Las Vegas and Tamarack have also been the subject of bankruptcy proceedings, court records show.
The four resorts are among many high-end properties that have struggled with falling real estate values and the credit crisis.
Credit Suisse spokesman Duncan King and Cushman and Wakefield spokesman Dwayne Doherty each said the lawsuit lacks merit, and that their companies will defend themselves.
Robert Huntley, an Idaho lawyer representing the plaintiffs, did not return calls seeking a comment.
According to the complaint, Credit Suisse violated federal racketeering laws by concocting a "loan to own" scheme that inflated the value of resorts and burdened the resorts and purchasers of homes there with too much debt.
Using appraisal methods provided by Cushman and Wakefield, this scheme allowed Credit Suisse to win "enormous fees" and ultimately foreclose on or take control of the resorts at well below market value, the complaint said.
"The scheme has been a financial heist for Credit Suisse with no risk," the complaint said.
"Credit Suisse knew at the time the lending advice and authorisations were given that its scheme and tactics would cause the developers and the resorts financial ruin, resulting in the ultimate takeover by Credit Suisse," it added.
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