Cushman & Wakefield are moving to strike comments made by a key "whistleblower" off the record in a $24 billion lawsuit implicating the former Ginn Sur Mer development on Grand Bahama.
According to court documents filed in the United States District Court in Idaho, the international real estate company has submitted a deposition whereby former appraiser Michael Miller contradicts key statements made to the plaintiffs' lawyers more than one year ago.
Based on the affidavit, Cushman & Wakefield argues the court must reconsider its ruling on their motion to dismiss the charges.
Ginn Sur Mer, a $4.9 billion "mega mix" resort, is one of four luxury resort communities
involved in the case. The plaintiffs claim they were allegedly victim to a "loan to own" scheme that brought down the projects.
The lawsuit alleges that Credit Suisse encouraged the loans based on inflated appraisals performed by Cushman & Wakefield, which essentially overburdened the resorts and caused them to fail.
The defendants face a number of charges, including fraud, negligent misrepresentation, breach of fiduciary duty, unjust enrichment and Consumer Protection Act violations.
Credit Suisse and Cushman & Wakefield deny all charges.
In this latest development, Miller, the former appraiser of Cushman & Wakefield, submitted a statement calling into question his previous statements in support of the plaintiffs.
In particular, Miller said he prepared total net value (TNV) appraisals "and he does not believe TNV appraisals are misleading or illegal".
"Miller also described important points about his March 2011 meeting with plaintiffs' counsel: He attended the meeting not as a whistleblower, but at the insistence of his boss, and believing that the meeting was part of his potential retention as an export witness," the court document said. "He also refused to sign the declaration because he was not comfortable with it, wanted to confirm its accuracy, and wanted to review the confidentiality provisions of his employment agreements with C&W and Grubb & Ellis."
The court document, filed by lawyers representing Cushman & Wakefield, contend the plaintiffs have repeatedly asserted that Miller was a "whistleblower-type witness". It said the plaintiffs have used it as testimony, which incriminates both Cushman & Wakefield and Credit Cuisse of knowing and intentionally developing and utilizing the misleading, and likely illegal, TNV and total net proceeds methodologies.
In a transcript obtained by Guardian Business, the former Cushman & Wakefield employee, when asked if the appraisals were misleading, said: "As best as I understand it, no."
He also insisted in the deposition that a number of development projects are not performing as a result of the recession and a downturn in the property market, and he does not blame this on the appraisals.
The apparent turnaround of a key witness may cast doubt over the $24 billion lawsuit.
One of the plaintiffs in the case, L.J. Gibson, was an investor and property owner in the Ginn Sur Mer development. According to previous court documents, the plaintiffs class "is so numerous that the joinder of all members is impracticable".
Therefore, the plaintiffs, with approval from the court, proposed separate funds to be created for stakeholders in the four luxury resorts allegedly victimized.
The other resorts seeking damages include Tamarack Resort, Yellowstone Club and Lake Las Vegas.
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, investors allege the Ginn Sur Mer project was on track before Credit Suisse forced it into default in 2008.
The plaintiffs claim they were induced to borrow "unreasonably excessive amounts" based on inflated valuations.
Credit Suisse, court documents said, subsequently charged tens of millions in "exorbitant" loan fees, which eventually caused the project to become financially insolvent and fail.
The defendants allege that Credit Suisse "wrongfully acquired ownership" and became "de facto" successor developer after Ginn went into default.

Click here to read more at The Nassau Guardian