BOISE, Idaho (AP) — Attorneys for Credit Suisse told a federal judge in Idaho that a multi-billion dollar lawsuit brought by homeowners at four resorts should be tossed out because there's not enough factual evidence to support the claims.
The lawsuit from property owners at Idaho's Tamarack Resort, the Yellowstone Club in Montana, Nevada's Lake Las Vegas resort and the Ginn Sur Mer Resort in the Bahamas is backed by Yellowstone Club founder Tim Blixseth. The plaintiffs allege Credit Suisse inflated the value of the resorts and issued loans so large to developers that they could never be repaid in hopes of foreclosing on the properties as part of a so-called "loan to own" scheme.
Credit Suisse contends the lawsuit is baseless and that Blixseth is just trying to escape blame for the financial problems at the ultra-exclusive Yellowstone Club.
Roughly two dozen attorneys representing the plaintiffs, Credit Suisse and real estate consultant Cushman & Wakefield gathered before U.S. District Judge Ronald Bush in Boise on Thursday to argue over several motions, including one to have the lawsuit dismissed and one to have Cushman & Wakefield reinstated as a defendant. The real estate consultancy was listed as a defendant when the case was originally filed in 2010, but last year U.S. District Judge Edward Lodge dismissed all the claims against the company.
One of Credit Suisse's attorneys, David Lender, told the court that the plaintiffs have never been able to show there was any misrepresentation made to the homeowners by the bank.
None of the plaintiffs have said that they read the appraisals of the resorts and relied on them in any way, Lender said. Nor does the complaint name people who allegedly decided to buy after developers told them how much the resort had been loaned, he said.
"That we allegedly told the developers to go out and tell people about the loans to induce people to buy?" Lender said. "Here's the problem: I read the complaint three times and you still won't be able to identify anyone."
James Sabalos, one of the attorneys representing the plaintiffs, said his clients absolutely were influenced by the amount of loans Credit Suisse had given the resort and the high appraisals issued for the land, believing that if a big, international bank valued the land so highly they should too.
"People assume international banks are going to obey the law, do things right and be honest," he said. "They don't assume that loans are going to be made that absolutely rupture and destroy their lives."
Attorneys for Credit Suisse and Cushman & Wakefield also opposed an effort from Tamarack founder Alfredo Miguel and Tim Blixseth to join in as plaintiffs on the case. The attorneys said the case was complicated enough without adding Miguel and Blixseth into the mix, and that their motion to intervene came too late to be allowable.
Attorneys for Blixseth and Miguel countered that because of rulings and ongoing litigation in other cases, the men were only now able to focus on this lawsuit.
The judge took the matter under advisement and said he would issue a written ruling at a later date.
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