Credit Suisse says plaintiffs in $24 billion predatory lending lawsuit have no claims
By Rebecca Boone, APTuesday, March 30, 2010
Credit Suisse says lending lawsuit without merit
BOISE, Idaho — Defense attorneys want a federal judge to throw out a $24 billion predatory lending lawsuit filed against Credit Suisse Group by investors in broke resorts in the West and the Bahamas.
The investors contend Credit Suisse set up a branch in the Cayman Islands to skirt U.S. rules and appraised the resorts at inflated prices as part of a scheme to later foreclose on the properties.
In court documents filed Monday, attorneys for Credit Suisse said the legal action was based on absurd claims by people who never borrowed money from the bank.
“This court is not required to suspend its common sense in considering and evaluating plaintiffs’ absurd claims,” the attorneys said in the motion.
The original lawsuit was filed in January by investors in Idaho’s Tamarack Resort, the Yellowstone Club in Montana, Nevada’s Lake Las Vegas resort and the Ginn Sur Mer Resort in the Bahamas.
Credit Suisse said the investors were looking for a billion-dollar payday.
“It is noteworthy that plaintiffs fail to cite a single specific misrepresentation made by Credit Suisse to any of them in their rambling, repetitive, and internally inconsistent 115-page complaint,” the attorneys said.
In the complaint, investors detailed what they called a loan-to-own scheme, contending that Credit Suisse planned to make money on both ends of the resort lending deals — first by collecting millions of dollars in loan fees and later by foreclosing and flipping the resorts.
To back the claims, the investors cited a statement made last May by U.S. Bankruptcy Judge Ralph Kirscher, who handled the Yellowstone Club case.
In an order filed in the case, Kirscher said Credit Suisse was driven by “naked greed” and the desire to get more loan fees, and used overreaching and predatory lending practices with disregard for the developer and others invested in the resort.
Credit Suisse pointed out that Kirscher later vacated that order.
