A botched $4.9 billion resort project in The Bahamas is officially embroiled in a proposed class action lawsuit involving thousands of investors. Ginn Sur Mer on Grand Bahama is one of four major developments implicated in a massive legal battle against Credit Suisse Group AG and Cushman & Wakefield. The plaintiffs are seeking up to $24 billion in damages.
According to court documents obtained by Guardian Business, a group of property owners have requested an Idaho federal judge for class certification. In essence, the approval would open the door to a trial, whereby hundreds of investors from Grand Bahama could be represented. Lawyers for the plaintiffs allege Credit Suisse and Cushman & Wakefield conspired to hatch a "loan-to-own" scheme, causing the financial ruin and operational failure at the resorts.
Inaccurate appraisals by Cushman & Wakefield tricked the communities into believing they could afford to take on more debt, the plaintiffs claim, forcing property owners to default and lose their rights and benefits. Ginn Sur Mer, placed under "Subclass IV", includes "all persons or entities who purchased or acquired by exchange of valid consideration any interest, entitlement or privilege for access, utilization or benefit of any facility, club membership or planned community known as Gin Sur Mer," according to the court document.
Plaintiff L.J Gibson is serving as class representative. Robert C. Huntley, a lead attorney for the plaintiffs, speculated that Ginn investors make up a little less than a fourth of the claims. In all, the proposed class would involve more than 3,000 individuals and entities with interests in thousands of lots at these resorts. "I have practiced law for 51 years, and it's the biggest base I have ever had. Of any kind. I think it will take another year and a half to go to trial.
Once we get class certification, we might be able to go to mediation or settlement discussion," Huntley told Guardian Business. The defendants - Credit Suisse and Cushman & Wakefield - are so large that individual claims are nearly impossible, he added. Much of the case could hinge on the plaintiff's ability to show intent on the part of the defendants that stretches across all four resorts.
"Plaintiffs assert a common course of negligent or intentionally wrongful conduct by defendants - the loan-to-own scheme - that has affected each MPC community in the same way," the document stated. Back in April, U.S. magistrate Judge Ronald E. Bush tossed out a number of charges, but upheld allegations of fraud, negligent misrepresentation, and tortuous interference and negligence claims.
Those charges are the most significant in the plaintiffs' quest for $24 billion in damages. Comprising nearly 900 homes, two championship ocean-front golf courses, 4,400 condominium hotel units, two marinas, a casino, a medical facility and a private airport expansion, the resort would have served as the bedrock of the now struggling Grand Bahama economy. The other resorts seeking damages in the case, all in the U.S., include Tamarack Resort, Yellowstone Club and Lake Las Vegas.
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