Credit Suisse Ordered to Pay $287.5M Over Failed Loan Program

Photo by Thomas Wolf

Last Friday, Credit Suisse was ordered to fork over $287.5M ($211.9M in damages and restitution, $75.6M in prejudgment damages and interest) to James Dondero’s hedge-fund firm, Highland Capital Management, over a soured bank loan. In a case tied to a $40M award against Credit Suisse over inflated appraisals, US District Court Judge Dale B. Tillery said Credit Suisse must pay for a breach of contract on a loan on the now bankrupt Lake Las Vegas planned community. Dondero’s Highland is currently engaged in a multi-pronged fight with Credit Suisse, trying to recoup losses from Credit Suisse’s failed loan program to US luxury property developers. When all the properties that Credit Suisse lent to went bankrupt or forcefully restructured, Credit Suisse (shown: Credit Suisse's Zurich HQ) bought many of them at discounted rates. With investors losing millions, it was only a matter of time before one of them brought the company to court. While Highland spokesman Tom Becker said the company was pleased the court agreed with it on Credit Suisse’s frauds and torts (although it was seeking another $340M award), Credit Suisse spokeswoman Nicole Sharp said officials there respectfully disagreed with the decision and are pursuing options to “vindicate” the company. [WSJ]

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