Credit Suisse Sued Over Resort Failures
Should a lender be held accountable for a resort's failure? A class action suit may bring one answer. The Wall Street Journal reports on a suit filed by property owners at four resorts. The suit accuses Credit Suisse Group AG of predatory lending. The $24 billion suit was filed on behalf of over 3,000 homeowners and investors and includes Beau Blixseth, the son of former Yellowstone club owners Tim and Edra Blixseth. Yellowstone Club is one of the properties named in the suit, the others are Ginn Sur Mer in the Bahamas, the Lake Las Vegas resort in Nevada and the Tamarack Resort in Idaho. So far all of these properties except for Ginn Sur Mer have wrestled with bankruptcy. The plaintiffs have lost more than $8 billion in their investments.
Court papers accuse Credit Suisse and related corporations of wire and mail fraud, racketeering, money laundering and conspiracy all in the name of coercing developers to take out huge loans. The suit also takes on real-estate adviser Cushman & Wakefield Inc., saying that the firm aided the bank by creating property appraisals that inflated the value of the properties for sale. The suit says that the bank knowingly drove up the value of the properties, made massive loans and then charged exorbitant loan fees that it knew the resorts wouldn't be able to pay. The suit alleges that all this was done so the banks could take control of the resorts.
According to the Wall Street Journal article, U.S. Bankruptcy Court Judge Ralph B. Kirscher, who was assigned to Yellowstone's bankruptcy case has already said that Credit Suisse used a "predatory" loan scheme that lured developers to borrow more than they could pay back. It's a larger version of what happened to homeowners all across the United States.
All of the resorts launched with very ambitious plans. When Tamarack was launched in 2003, tennis stars Andre Agassi and Steffi Graf were attached to the project and buyers committed more than $500 million for condos, houses and building sites. Former President George W. Bush visited the resort for a summer hike in 2005. But the town, which swelled to accommodate a future as a big resort town, is now facing massive unemployment and many of the structures created for the resort remain partially finished. Lake Las Vegas began with similar high hopes. The community offered a less glitzy retreat still within striking distance to Sin City. Luxury resorts moved in and real estate spiked. But as the Las Vegas real estate market plummeted along with Vegas tourism, the once prosperous resort began to face hotel foreclosures and stalled construction. The Yellowstone Club was perhaps the most famous of them all. It was a luxury enclave for the megarich, offering a woodsy retreat with the most exclusive and exquisite goods and services. Once a $155 million spec home was planned for the resort. Now the club has been sold off and the furnishings have been auctioned off as the now bitterly divorced former owners, Tim and Edra Blixseth try to sell off their remaining assets and pick up the pieces.
All of the resorts launched with very ambitious plans. When Tamarack was launched in 2003, tennis stars Andre Agassi and Steffi Graf were attached to the project and buyers committed more than $500 million for condos, houses and building sites. Former President George W. Bush visited the resort for a summer hike in 2005. But the town, which swelled to accommodate a future as a big resort town, is now facing massive unemployment and many of the structures created for the resort remain partially finished. Lake Las Vegas began with similar high hopes. The community offered a less glitzy retreat still within striking distance to Sin City. Luxury resorts moved in and real estate spiked. But as the Las Vegas real estate market plummeted along with Vegas tourism, the once prosperous resort began to face hotel foreclosures and stalled construction. The Yellowstone Club was perhaps the most famous of them all. It was a luxury enclave for the megarich, offering a woodsy retreat with the most exclusive and exquisite goods and services. Once a $155 million spec home was planned for the resort. Now the club has been sold off and the furnishings have been auctioned off as the now bitterly divorced former owners, Tim and Edra Blixseth try to sell off their remaining assets and pick up the pieces.
Charlie Sheen Gets Back To His Roots
The List #0147: Escape a Car Underwater
WHOOPS! Obama Makes Big Gaffe
Visit the Maldive Islands Before It's Too Late
Reptiles Make Home in UK Man's Cable Box
Mariah Carey Curses And Busts Out Of Dress On Live TV
Springtime Budget-Busters -- Savings Experiment
Distraught Mom Becomes Face of Oklahoma Storm
Killed Soldier In London Attack Identified
Is This Woman Too Pretty To Work?
Mariah Carey Suffers Wardrobe Malfunction on Good Morning America
What It's Like To Talk To A 2-Year-Old
The Story Behind Hairspray
Amanda Bynes Arrested, Undergoes Psychiatric Evaluation--See the Shocking Mugshot!
Luke Wilson Caught Staring At Fan's Chest
Carrie Underwood Donates $1 Million to Oklahoma Tornado Victims
Rapper Accused Of Faking His Own Death To Escape Payments
Danny Tanner Is Fighting With Topanga
Best Friends Reportedly Die Holding Each Other In Tornado
New Trayvon Martin Evidence Features Incriminating Photos, Texts From Teen
Jury Foreman: '18 Days Of Testimony Hurt' Jodi Arias
Teenager's 'Awww'-Inspiring Drawing Wins Big At Google
Brave Woman Stood Down Armed London Attackers
WATCH: Police Force Shows Up To Support 5-Year-Old Who Lost Her Dad
Janet Jackson Joins The Billionaires' Club
Jodi Arias Jury DEADLOCKED
Woman Pictured 'Praying For & Comforting' Dying Victim
Bridge Collapses In Washington State
Helen Flanagan Launches PETA Campaign As Only She Knows How
LISTEN: Terror Inside Elementary School As Tornado Hits
Mum-Of-Two Faces Down Woolwich Attack Suspects
Woolwich Attack Victim Named As Lee Rigby
Reader Comments (Page 1 of 1)
srsrea Jan 4th 2010 7:35PM
It was my understanding that Tim Blixseth took the procedes from a Credit Suisse loan of $375,000,000, got a free and clear 25,000 SF home on 160 acres in Yellowstone Club, saddled Edra with a $33,000,000 on their Rancho Mirage property and got several other free and clear assets in their divorce.
Are you saying that this "timber baron" billionaire did not know what he was doing? Maybe the plaintiff's should be suing Him.
srsrea Jan 4th 2010 7:44PM
It was my understanding that Tim Blixseth took the procedes from a
Credit Suisse loan of $375,000,000, got a free and clear 25,000 SF
home on 160 acres in Yellowstone Club, saddled Edra with a
$33,000,000 on their Rancho Mirage property and got several other
free and clear assets in their divorce.
Are you saying that this "timber baron" billionaire did not know what
he was doing? Maybe the plaintiff's should be suing Him.