Credit Suisse has been sued for whopping $24 billion by property owners of several struggling and bankrupt luxury resorts in Montana, Nevada, Idaho and the Bahamas who claim the bank made loans to the resorts’ investors as part of a scheme to take over the properties.
Property owners at Idaho’s Tamarack Resort, the Yellowstone Club, Montana’s highest-end resort, Nevada’s Lake Las Vegas resort and the Gin Sur Mer Resort in the Bahamas filed the lawsuit in Boise’s U.S. District Court on Sunday. The complaint alleges racketeering, breach of fiduciary duty, fraud and negligence.
Reuters: “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 authorizations 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.
The lawsuit seeks $8 billion of actual damages, including alleged losses of property, business interests and reputation, plus $16 billion of punitive damages on behalf of at least 3,000 investors.
Beau Blixseth, one of the plaintiffs, is suing for losses from his property at Yellowstone Club in Montana, which was developed by his father Tim, a timber baron and former billionaire. That resort, whose membership comes with a minimum of $250K to join, plus the cost of a $5 – $35 million mountainside home, plus annual dues of about $20K, according to members, borrowed $375 million from Credit Suisse in September 2005 and sought bankruptcy protection in November 2008.
Last May, a federal judge overseeing Yellowstone’s bankruptcy faulted Credit Suisse in an interim order for “predatory lending practices” that he said caused “financial ruin” for several resorts.
“The naked greed in this case, combined with Credit Suisse’s complete disregard for the debtors or any other person or entity who was subordinated to Credit Suisse’s first-lien position, shocks the conscience of this court,” Judge Ralph Kirscher wrote in his interim decision.