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Two principals at failed western resorts are now trying to recoup money they lost when their developments imploded by joining a $2.5 billion lawsuit against Credit Suisse Group.
Alfredo Miguel of Idaho's Tamarack Resort and Tim Blixseth of Montana's Yellowstone Club want a federal judge for permission to join a 2010 lawsuit contending the Zurich-based bank used a predatory lending scheme to defraud them.
The original lawsuit claims Credit Suisse set up an offshore branch to skirt U.S. rules, appraise resorts at inflated prices, provide loans the properties could not repay then ultimately take control of the resorts through foreclosure.
It was filed by owners of properties including Tamarack, Yellowstone Club, Nevada's Lake Las Vegas resort and the Ginn Sur Mer Resort in the Bahamas.
Miguel and Blixseth contend "shoddy, deceitful, misleading and fraudulent appraisals" led to bloated loans that were doomed to fail, costing innocent borrowers and others dearly. Meanwhile, Credit Suisse protected itself by syndicating the loans, they said.
"Had Mr. Blixseth known that Credit Suisse's loan was grossly inflated, unlawful or of Credit Suisse's true intentions, Mr. Blixseth would never have engaged in the transaction with Credit Suisse," according to his motion to intervene filed in U.S. District Court in Boise.
Miguel also alleges Credit Suisse and a loan syndicate member tried to shake him down for $1.2 million in exchange for releasing him from a personal guarantee for the loan.
Credit Suisse said in a statement on Monday the charges are baseless.
"Credit Suisse rejects Mr. Blixseth's and Mr. Miguel's entirely meritless allegations and their attempt to latch onto an existing suit which has already seen many of the plaintiffs' claims dismissed," said Steven Vames, a spokesman for the bank in New York. "For Mr. Blixseth, in particular, this is simply the latest attempt to shift blame to others and away from his own conduct."
Blixseth, among other things, was ordered to pay $40 million to creditors in 2010 when a federal judge pinned the financial collapse of the ultra-exclusive Yellowstone Club on a series of fraudulent deals.
During this saga, Blixseth has seen his estimated fortune collapse from about $1.3 billion to some $200 million.
Meanwhile, Miguel's partner at Tamarack, French-born majority owner Jean-Pierre Boespflug, is on the run from the courts after skipping a hearing in June that focused on his responsibility to pay for two ski lifts. He faces fines of $5,000 for every day he stays away.