Source:
APA federal bankruptcy judge ruled Tuesday that a $375 million loan Credit Suisse made to a resort for the ultrarich was predatory and should be subordinated to other debts.
Judge Ralph Kirscher wrote in a partial and interim order that the Swiss bank “lined its pockets” on the backs of the Yellowstone Club’s creditors and that it devised a scheme to encourage developers of high-end residential resorts to borrow large sums without regard for their ability to repay.
Kirscher said Credit Suisse’s actions “were so far overreaching and self-serving that they shocked the conscience of the court.”
. . .
Most of the $209 million was moved into Tim Blixseth’s personal accounts and $27 million of it was used to pay off existing debts on luxury jets and estates, including Porcupine Creek, a huge estate near Palm Springs, Calif., with a 30,000-square-foot house and a private championship golf course.
. . .
Once attorneys involved in the loan were paid and Credit Suisse took its $7.4 million cut, just $38 million was left over for the club.
“The only plausible explanation for Credit Suisse’s actions is that it was simply driven by the fees it was extracting from the loans it was selling, and letting the chips fall where they may,” Kirscher wrote.
According to the ruling, Credit Suisse made similar loans to at least five other havens for the wealthy that have since failed or declared bankruptcy, including Tamarack Resort in Idaho.
Read more:
http://www.helenair.com/articles/2009/05/13/state/65st_090513_club.txt
The judge finds the bank is a crook and the only punishment is that the bank loses its preferred place in the creditor line.
Corruption pays.
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