Credit Suisse challenges court order to pay $288m in mortage suit

GMT 19:02 2015 Monday ,07 September

Arab Today, arab today Credit Suisse challenges court order to pay $288m in mortage suit

Credit Suisse
Zurich - AFP

Swiss banking giant Credit Suisse on Monday challenged a court ruling ordering it to pay a US hedge fund $287.5 million (257.6 million euros) in a case linked to the burst housing bubble.

A court in the US state of Texas ruled last week in favour of a unit of Highland Capital Management in a suit against the bank for an overvalued real estate project called Lake Las Vegas, which the hedge fund unit invested in in 2007.

A year later, the planned Nevada resort community filed for bankruptcy as the subprime crisis erupted.

A Dallas judge ordered Credit Suisse to pay $211.9 million in damages and restitution and $75.6 million in prejudgement damages and interest, following a jury ruling last year finding Switzerland's second largest bank had inflated appraisals on development projects.

"We respectfully disagree with the court's decision," the bank told AFP in an email, adding that it planned to "pursue all available options" to oppose the ruling.

In its second quarter earnings report, Credit Suisse said it had put aside 124 million Swiss francs ($127 million, 113 million euros) to cover legal expenses.

It said in that earnings report that it did not expect the Highland Capital Management lawsuit to have a significant impact on its results, although it acknowledged that the final costs could be higher than expected.

In February, the bank was forced to adjust its earnings for the fourth quarter of 2014 after adding an extra 277 million Swiss francs to its provisions linked ongoing legal settlements in the United States.


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