A federal judge has dismissed a $24 billion lawsuit accusing Credit Suisse of running a predatory loan-to-own scheme that plaintiffs claimed loaded four luxury ski and golf resorts with debt so it could foreclose on their assets, The Wall Street Journal yesterday. District Court Judge Justin L. Quackenbush granted a request from Credit Suisse and real estate adviser Cushman & Wakefield for summary judgment, dismissing the suit and handing a big victory to the two companies in a six-year-long legal battle involving ultra-luxe vacation resorts in the Caribbean and western U.S. The lawsuit, filed in 2010 on behalf of more than 3,000 homeowners, property owners and other investors, accused Credit Suisse of piling the resorts up with debt during the real estate boom so it could foreclose on their assets. Judge Quackenbush said that the homeowners failed to show that “Credit Suisse wanted to own the resorts.” In addition, the judge ruled Cushman's appraisals didn't cause the property owners' losses. The judge said that property owners failed to show that a loan-to-own program devised by Credit Suisse — and not the nationwide housing market collapse — caused the resorts' developers to default. The property owners claimed to have lost more than $8 billion, for which they sought three times that amount in the damages, on their investments at Ginn Sur Mer Resort in the Bahamas, the Lake Las Vegas resort in Nevada, the Tamarack Resort in Idaho and the Yellowstone Club in Montana. Credit Suisse was a big player in arranging the financing of a number of upscale Western resorts that have since tumbled into bankruptcy. The bank marketed the loans to the developers of the high-end resorts.
