Investors at four luxury resorts have filed a $24 billion lawsuit against Cushman & Wakefield and Credit Suisse.The two firms are accused of conspiring to encourage the developers to take out loans they would never be able to pay back on the properties in the US and the Bahamas so the bank could take them over.Cushman & Wakefield allegedly used a method of appraisal that inflated the resorts’ value, allowing Credit Suisse to collect large fees on the loans using a Cayman Islands branch to circumvent federal law on real estate appraisalsA spokesperson for Credit Suisse, Sofia Rehman, told OPP: “We believe the suit is without merit and we will defend ourselves vigorously.” Cushman & Wakefield have made similar statements.The lawsuit was filed on Sunday 3 December in a US district court in Idaho by L.J. Gibson and Beau Blixseth, son of the developer of Yellowstone Club in Montana. They are also seeking class action status for more than 3,000 investors who bought property at Yellowstone, as well as Lake Las Vegas in Nevada, Tamarack Resort in Idaho and Ginn sur Mer in the Bahamas.Credit Suisse were first accused of creating a “predatory” loan scheme during Yellowstone’s bankruptcy proceedings in May 2009, when US judge Ralph B Kirscher said the bank was driven by “naked greed”. The order was later overturned when Yellowstone reached a settlement with its creditors.
This is according to an article in the OPP magazine.
How many times have we said, if so and so says its OK, it must be, when evaluating property values or propositions. How much is trust based on the simple principle that "they wouldnt want to damage their reputation".
If this lawsuit is sucessful then who can we trust?
Wednesday, 6 January 2010
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