Excerpt from: Ski Resort Newsroom
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| January 06, 2010 | | Suit claims that appraisals were inflated and real estate loans predatory | More than 3,000 investors are queuing up to sue Credit Suisse for fraud, negligence, breach of fiduciary duty and fraud. Property owners at ski resort markets at Tamarack and Yellowstone, and resort investors in the Bahamas, are upset at their losses, and have decided to Credit Suisse.
BusinessWeek reports on the suit against Credit Suisse:
L.J. Gibson and Beau Blixseth are seeking $24 billion in damages on
behalf of at least 3,000 investors who bought land or homes at four
developments, including Tamarack Resort in Idaho, that received loans
from Credit Suisse, according to a complaint filed yesterday in federal
court in Idaho. ...
[The suit claims that] Starting in 2004, Credit Suisse engaged in a
“loan-to-own scheme” that encouraged developers to take cash out of
their resort projects in the form of loans or “profit dividend” based
on projected future growth, according to the complaint.
That led developers to “mortgage their development
projects to the hilt,” leaving resorts with “excessive and
unsustainable debt,” according to the complaint. The bank collected
fees and sold the loans to investors, the suit said.
As Tamarack ski resort in Idaho and Yellowstone Club in Montana both filed for bankruptcy, investors tried to do what they could. Credit Suisse has retained the right to collect on the purchase of Yellowstone Club, and that has those investors upset, since preempts their claims to a portion of the sale.
It will be interesting to see how this turns out.
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