Category Archives: Fund Management

James Dondero Explains His Company’s Lawsuits against Credit Suisse

James Dondero’s company, Highland Capital Management, recently prevailed in court against Credit Suisse. His company had sued Credit Suisse and an appeals court in Texas upheld a lower court’s ruling, awarding Highland Capital Management $351 million. However, Credit Suisse has vowed to continue fighting despite once again losing in court. Read this article at barrons.com.

The lawsuit was a result of a financial transaction in 2007. James Dondero says that his firm helped to refinance a loan which was supposed to be used to build a resort in Las Vegas that would be located on an artificial lake. However, right after Credit Suisse got the money from Highland Capital Management the project declared Chapter 11 bankruptcy. James Dondero’s company sued Credit Suisse because of this and in 2014 a jury in Texas decided that Credit Suisse had defrauded the investors in order to get a $540 million loan. Read more about James at Crunchbase.

The next stop for the lawsuit will be the Texas Supreme Court. Credit Suisse is making the argument that the court’s decision is not supported by the applicable laws. The appeals process will take up to a year before the Texas Supreme Court issues any ruling on it. After the win in the appeals court James Dondero said that he regarded it as a major milestone and he looked forward to recovering damages for his company and its investors.

Credit Suisse had arranged around $3 billion for a number of projects. In addition to the Las Vegas project they also had one in Idaho that was to build the Tamarack Resort. They also had Yellowstone Club planned for Montana as well as resorts in North Carolina, Florida, as well as the Bahamas. All of this collapsed and Credit Suisse is accused of intentionally overvaluing these projects by using appraisal methods which were not acceptable.

In addition the lawsuit in Texas, there have also been lawsuits between Highland Capital Management and Credit Suisse in the state of New York as well. They also have another lawsuit in Idaho which was resolved in 2016. In that lawsuit Highland Capital Management alleged that Credit Suisse had come up with an illegal “loan-to-own” program. Credit Suisse had that lawsuit dismissed but Highland Capital Management is appealing that decision.

Visit: http://www.jamesdondero.com/