Resort owners sue Credit Suisse for $24bn over luxury property schemes

Credit Suisse has been sued by property owners who said the Swiss bank schemed to defraud investors in four luxury resort communities, including the bankrupted Yellowstone Club.

The lawsuit filed in federal court in Boise, Idaho, seeks $24bn (£15bn) of damages against Credit Suisse and commercial real estate firm Cushman & Wakefield, and class-action status for investors and property owners. The alleged losses relate to resorts in Nevada, Idaho and the Bahamas.

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 methodology provided by Cushman & Wakefield, this scheme allowed Credit Suisse to win “enormous fees”, and ultimately foreclose on or take control of 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.
The complaint seeks $8bn of actual damages.