Corporate & Securities Law

We are investigating so-called loan-to-own schemes following news that Credit Suisse is accused of defrauding investors in four resorts.

Investors at four high-end resorts have filed a $24 billion class-action lawsuit against Credit Suisse and the real estate services company Cushman & Wakefield, contending that they conspired to inflate the value of the properties so they could take them over.

The suit, outlined in an 84-page complaint filed in federal court in Boise, Idaho, details what it calls a sweeping loan-to-own scheme.  Credit Suisse, according to the complaint, raked in huge fees on loans against the properties, which it syndicated and sold to hedge fund managers.  If the resorts could not pay back the hundreds of millions of dollars in loans, based on the inflated values, Credit Suisse could either assume ownership as the agent for the creditors or sell the resorts.

The properties include the Yellowstone Club at Big Sky, Montana, which has multimillion-dollar "ski-in-ski-out" homes and private slopes.  Its members include Bill Gates, the Microsoft chairman; the golfer Annika Sorenstam; former Vice President Dan Quayle; and Peter Chernin, former president and chief operating officer of the News Corporation. In addition, developers and property owners at Lake Las Vegas in southern Nevada, the Tamarack Resort in central Idaho and Ginn sur Mer in the Bahamas are also party to the lawsuit.

The suit was brought on behalf of at least 3,000 investors.

Source: The New York Times