\nA Swiss bank is being sued for $24 billion by property owners who claim it schemed to defraud investors in several development resorts in the US including the bankrupted Yellowstone Club.
\nIn a lawsuit filed on Sunday in the federal court in Idaho, the plaintiffs, on behalf of 3,000 investors, said banking giant Credit Suisse colluded with real estate firm and co-defendant Cushman & Wakefield in a \u2018loan to own\u2019 scheme to artificially inflate the value of resort projects.\n<\/p>\n
\nAccording to papers lodged in court the scheme was designed to burden resorts and purchasers of property in resorts with too much debt, while winning Credit Suisse \u2018enormous fees\u2019 and letting the bank foreclose on or take control of resorts at well below market value.
\n\u2018The scheme has been a financial heist for Credit Suisse with no risk,\u2019 according to 81 pages of detailed allegations that include the claim that the scheme began in 2004 when Credit Suisse encouraged developers to take cash out of their resort projects in the form of loans or \u2018profit dividend\u2019 based on projected future growth.\n<\/p>\n
\nThat led developers to \u2018mortgage their development projects to the hilt,\u2019 leaving resorts with \u2018excessive and unsustainable debt,\u2019 the complaint says. The bank collected fees and sold the loans to investors, the lawsuit adds.
\nWhen the real estate market collapsed the resorts went into default or sought bankruptcy protection, devastating property owners who were promised pools, golf courses, shops, hotels and other luxury amenities.
\nCredit Suisse \u2018has received huge fees up-front and consummated ownership or control over all but one high-end resort,\u2019 the complaint continues.
\nThe lawsuit alleges losses relating to Yellowstone, a private club for millionaires in Montana, as well as to Lake Las Vegas in Nevada, the Tamarack ski resort in Idaho and Ginn Sur Mer on Grand Bahama Island.\n<\/p>\n
\nThe plaintiffs are L.J. Gibson and Beau Blixseth. Blixseth, the son of Timothy Blixseth, a timber baron and onetime billionaire who developed Yellowstone, says he lost money and the use of his property rights in Yellowstone.
\nIn the lawsuit they are seeking class-action status for purchasers of property and homes in the developments. It seeks $8 billion of actual damages and $16 billion of punitive damages.\n<\/p>\n
\nWhen contacted Credit Suisse head quarters in Zurich declined to comment. Cushman & Wakefield also refused to talk about the legal case.<\/p>\n","protected":false},"excerpt":{"rendered":"
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