(Bloomberg) -- Credit Suisse Group AG won a lawsuit by property owners in four upscale resorts in the western U.S. who alleged that the investment bank funded loans based on inflated appraisals of the developments that caused their financial ruin.
A federal judge in Boise, Idaho, agreed with Credit Suisse and the appraiser, Cushman & Wakefield Inc., that the property owners had failed to produce evidence that the loans or the appraisals from 2004 to 2006 caused the resorts to fail and that there was no need for the case to proceed to trial.
"While the defaults may have occurred, in some cases, within months after the loans closed, this alone is insufficient to raise an issue of fact as to causation," U.S. District Judge Justin Quackenbush said in his decision Wednesday. "The timing is further strained because the market collapse began during the same time frame as the defaults occurred."
The lawsuit was filed in January 2010 on behalf of 3,000 investors who bought land or homes at four developments, including Tamarack Resort in Idaho and the luxury Yellowstone Club in Montana.
The complaint claims the Zurich-based bank made predatory loans to developers based on appraisals provided by Cushman & Wakefield, leaving the resorts with excessive debt while the bank collected huge loan fees and “and consummated ownership or control over all but one high-end resort.”
James Sabalos, a lawyer for the plaintiffs, didn’t immediately respond to a call for comment on the ruling.
The case is L.J. Gibson v. Credit Suisse, 10-00001, U.S. District Court, District of Idaho (Boise).
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