Equitable Subordination and Recharacterization: Looming Threats in Bankruptcy Strategies for Lenders Creditors and Private Equity Sponsors to Avoid presents Strategies for Lenders, Creditors and Private Equity Sponsors to Avoid Claim Loss and Maintain Preference Status presents A Live 90-Minute Teleconference/Webinar with Interactive Q&A Today's panel features: Ronald A. Landen, Senior Associate, Weil Gotshal & Manges, Boston J. Thomas Beckett, Shareholder, Parsons Behle & Latimer, Salt Lake City, Utah Tuesday, April 13, 2010 The conference begins at: 1 pm Eastern 12 pm Central 11 am Mountain 10 am Pacific CLICK ON EACH FILE IN THE LEFT HAND COLUMN TO SEE INDIVIDUAL PRESENTATIONS. You can access the audio portion of the conference on the telephone or by using your computer's speakers. Please refer to the dial in/ log in instructions emailed to registrations. If no column is present: click Bookmarks or Pages on the left side of the window. If no icons are present: Click V iew, select N avigational Panels, and chose either Bookmarks or Pages. If you need assistance or to register for the audio portion, please call Strafford customer service at 800-926-7926 ext. 10
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Equitable Subordination and Recharacterization: Looming Threats in Bankruptcy
Strategies for Lenders Creditors and Private Equity Sponsors to Avoidpresents Strategies for Lenders, Creditors and Private Equity Sponsors to Avoid Claim Loss and Maintain Preference Status
presents
A Live 90-Minute Teleconference/Webinar with Interactive Q&A
Today's panel features:Ronald A. Landen, Senior Associate, Weil Gotshal & Manges, Boston
J. Thomas Beckett, Shareholder, Parsons Behle & Latimer, Salt Lake City, Utah
Tuesday, April 13, 2010
The conference begins at:1 pm Easternp12 pm Central
11 am Mountain10 am Pacific
CLICK ON EACH FILE IN THE LEFT HAND COLUMN TO SEE INDIVIDUAL PRESENTATIONS.
You can access the audio portion of the conference on the telephone or by using your computer's speakers.Please refer to the dial in/ log in instructions emailed to registrations.
If no column is present: click Bookmarks or Pages on the left side of the window.
If no icons are present: Click View, select Navigational Panels, and chose either Bookmarks or Pages.
If you need assistance or to register for the audio portion, please call Strafford customer service at 800-926-7926 ext. 10
CHARLES W. HINGLE (#1947)SHANE P. COLEMAN (#3417)HOLLAND & HART LLP401 NORTH 31st STREET, SUITE 1500BILLINGS, MONTANA 59101(406) 252-2166 (PHONE)(406) 252-1669 (FAX)[email protected] (EMAIL)[email protected] (EMAIL)
MARK S. CHEHI SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLPONE RODNEY SQUAREP.O. BOX 636WILMINGTON, DELAWARE 19899(302) 651-3000 (PHONE)[email protected] (EMAIL)Admitted Pro Hac Vice
ATTORNEYS FOR PLAINTIFF, CREDIT SUISSEAdditional Counsel listed on signature page
IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF MONTANA
In re:
YELLOWSTONE MOUNTAIN CLUB, LLC, et al.,
Debtors.
Case No. 08-61570-11-RBK
Jointly Administered with 08-61571, 08-61572, and 08-61573
Chapter 11
CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
Plaintiff,
vs.
OFFICIAL COMMITTEE OF UNSECURED CREDITORS, YELLOWSTONE MOUNTAIN CLUB, LLC, YELLOWSTONE DEVELOPMENT, LLC, BIG SKY RIDGE, LLC, and YELLOWSTONE CLUB CONSTRUCTION COMPANY, LLC,
Court entered an Interim Order Authorizing the Debtors to Obtain Post-Petition Financing (the
“Interim Order”).
18. Pursuant to the Interim Order, the Debtor irrevocably admitted, stipulated
and agreed as follows with respect to their obligations and Credit Suisse's rights under the Loan
Agreement:
(a) “As of the Petition Date, (i) the Debtors were truly and justly indebted and liable to (i) the Prepetition Lenders, without defense, counterclaim or offset of any kind, in the aggregate principal amount of approximately $307,000,000 in respect of [the Loan Agreement] plus, accrued and unpaid interest thereon . . .”
(b) “[T]he Prepetition Secured Obligations constitute the legal, valid and binding obligations of the Debtors, enforceable in accordance with their terms . . .”
(c) “[N]o portion of the Prepetition Secured Obligations are subject to avoidance, recharacterization, recovery or subordination pursuant to the Bankruptcy Code or applicable nonbankruptcy law;”
(d) "[T]he Debtors do not have, and hereby forever release, any claims, counterclaims, causes of action, defenses or setoff rights, . . ., against the Prepetition Agent, the Prepetition Lenders and their affiliates, . . . with respect to the Prepetition Secured Obligations,” and
(e) “[T]he liens and security interests granted to the Prepetition Agent and the Prepetition Lenders . . . are (i) valid, binding, perfected, enforceable first priority liens on and security interests in the Prepetition Collateral, [and] (ii) not subject to avoidance, recharacterization or subordination pursuant to the Bankruptcy or applicable nonbankrupty law . . .”
(Interim Order at Docket No. 40, ¶ 4)
19. Under the terms of the Interim Order, the aforesaid stipulations and
admissions are “binding upon the Debtors in all circumstances.” (Id. at 20, ¶ 18).
The Committee's Moves to File a Complaint Against Credit Suisse
20. On February 11, 2009, the Committee filed a Notice of Claim Against
Credit Suisse, Objection to Claim of Credit Suisse and Motion for Authorization to File
Complaint Against Credit Suisse, which attached as an exhibit the "Unfiled Complaint." The
WHEREFORE, Credit Suisse prays for the following judgments against the Committee:
1. That the Court declare that Credit Suisse has an allowed secured claim is
in the principal amount of $309,021,984.26, plus interest, fees and expenses;
2. That the Court declare that the Loan Agreement and the granting of liens
in connection therewith were not fraudulent transfers;
3. That the Committee is barred from pursuing the Unfiled Complaint by the
doctrine of in pari delicto; and
4. That the liens, security interests, and mortgages of Credit Suisse and the
Prepetition Lenders are valid and enforceable and not subject to avoidance or equitable
subordination.
Dated: Billings, MontanaFebruary 25, 2009
_/s/ Charles W. Hingle_______Charles W. HingleShane P. ColemanHOLLAND & HART LLP401 North 31st StreetSuite 1500Billings, Montana 59101(406) 252-2166 (Phone)[email protected] (Email)[email protected] (Email)
Of Counsel:Evan R. Levy (NY No. 2720068)George A. Zimmerman (NY No. _____ , pro hac vice pending)SKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLPFour Times SquareNew York, New York 10036(212) 735-3000
UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF MONTANA
In re
YELLOWSTONE MOUNTAIN CLUB,LLC,
Debtor.
Case No. 08-61570-11
CREDIT SUISSE and TIMOTHY LBLIXSETH,
Plaintiffs.
-vs-
OFFICIAL COMMITTEE OFUNSECURED CREDITORS,YELLOWSTONE MOUNTAIN CLUB,LLC, YELLOWSTONEDEVELOPMENT LLC, BIG SKYRIDGE, LLC, and YELLOWSTONECLUB CONSTRUCTION COMPANYLLC,
Defendants.
Adv No. 09-00014
Partial & InterimORDER
At Butte in said District this 13 day of May, 2009.th
In this Adversary Proceeding, trial was originally scheduled to commence at 09:00 a.m.
Blixseth listed George Mack as a trial witness in his Amended List of Witnesses filed1
April 27, 2009. Blixseth testified at trial that George Mack was in Missoula at the time of trialand available to testify. However, Blixseth did not call George Mack as a witness. After trial, aquestion arose regarding the admission into evidence of George Mack's deposition. BecauseGeorge Mack was available to testify, but was not called, the Court declines to consider GeorgeMack's deposition under Fed.R.Civ.P. 32(a), made applicable to this proceeding by F.R.B.P.7032. For the reasons just stated, and because Stephen R. Brown testified, the Court will
2
on Wednesday, April 22, 2009. However, after considering Timothy L. Blixseth's (“Blixseth”)
Expedited Motion to Bifurcate and Continue Trial of Claims Regarding Blixseth filed April 21,
2009, at Docket Entry No. 203, the Court continued the trial date to Wednesday, April 29,
2009. The Debtors were represented at the trial in this Adversary Proceeding by Tom
Hutchinson, Troy Greenfield, Connie Sue Martin and David A. Ernst of Seattle, Washington,
and James A. Patten of Billings, Montana; Credit Suisse was represented by Mark S. Chehi,
Robert S. Saunders and Joseph O. Larkin of Wilmington, Delaware, George A. Zimmerman,
Evan R. Levy and Jeremy M. Falcone of New York, New York, Edward J. Meehan of
Washington, D.C. and Shane Coleman of Billings, Montana; the Official Committee of
Unsecured Creditors was represented by J. Thomas Beckett, Chris P. Wangsgard, Derek
Langton, Sean D. Reyes and Mark W. Dykes of Salt Lake City, Utah, and James P. Cossitt of
Kalispell, Montana; and Blixseth was represented by Michael J. Flynn of Boston,
Massachusetts, Joseph M. Grant of Houston, Texas, and Joel E. Guthals of Billings, Montana.
The Court heard expert testimony from David Abshier, John Hekman, Kent Mordy, and
Christopher Donaldson. The Court heard fact testimony from Blixseth, Michael W. Doyle,
Stephen R. Brown, Moses Moore, Brad Foster, Samuel T. Byrne, Edra Blixseth, Steve
Yankauer, and Robert Sumpter. The testimony of the following witnesses was submitted
through deposition transcript: Jeff Barcy, Dean R. Paauw and William G. Griffon. Exhibit A1
Cushman & Wakefield's appraisal as of July 1, 2005, states that the Yellowstone Club3
“appeals to ultra-wealthy families as a second-home (or third-home) location for its privaterecreational facilities (particularly the ski area), views, and proximity to winter and summerrecreation. Prospective buyers are required to have a net worth of over $3 million, but based onthe costs of membership and housing, we would expect nearly all buyers to have investable assetsof at least $5 million, if not $10 million. The membership price for residents is $250,000 for a30-year refundable deposit. The price is expected to be increased during the sell-out period. Annual dues . . . were recently raised from $10,600 to $16,000 per year. Property ownersassociation (POA) dues are currently $5,100 per year.”
4
Company sold its land in the Gallatin National Forest to Blixseth and the McDougal brothers,
foresters from Oregon. Blixseth consolidated his land holdings with three deals with the federal
government to swap 100,000 acres he had just bought for the acreage that now encompasses the
Debtors’ real estate holdings known as the Yellowstone Club located in Madison County,
Montana. The deal with the government also included additional land in several other Montana
counties, plus 250 million feet of salable timber. The land swaps required two separate acts of
Congress. The first, known as the Gallatin Preservation Act of 1993, covered 38,000 acres and
was President Clinton’s first major piece of environmental legislation. The second act, in 1998,
is known as Gallatin II and involved another 54,000-acre swap. The public acquired another
8,100 acres in a third swap that was not subject to Congressional approval. Soon after the
assemblage was completed, Blixseth and the McDougals dissolved their partnership. The
timberland was distributed to the McDougal brothers and Blixseth retained the acreage that
could be developed.
Blixseth and his former wife, Edra Blixseth (“Edra”), formed the Debtor corporations
and on the land that Blixseth retained from his partnership with the McDougal brothers, began
development in late 1999 of the world’s only private ski and golf community, commonly
referred to as the Yellowstone Club. The Yellowstone Club is a membership only master-3
From what the Court understands, EBITDA can be used to analyze and compare4
profitability between companies and industries because it eliminates the effects of financing andaccounting decisions. However, this is a non-GAAP measure that allows a greater amount ofdiscretion as to what is, and is not, included in the calculation. EBITDA is a good metric toevaluate profitability, but not cash flow.
10
agreement on the terms of the Credit Agreement and executed the same. The Credit Agreement
provided for the disbursement of $375 million in loan proceeds to be distributed in two
significant ways after payment of $7.5 million in fees to Credit Suisse and other expenses
attributable to the loan. First, the Credit Agreement designated up to $209 million of the loan
proceeds to be used as "distributions or loans" for "purposes unrelated" to the Yellowstone
Club. Additionally, up to $142 million was authorized to be used for investments into
"unrestricted subsidiaries" for "purposes unrelated" to Yellowstone Club development. Thus,
the bulk of the loan proceeds, up to $351 million, were designated to be used for purposes
outside of, and unrelated to, the Yellowstone Club.
In the years leading up to the Credit Agreement, the Yellowstone Club carried a debt
load ranging from a low of approximately $4 to $5 million to a high of approximately $60
million on a revolving line of credit. The day before the Loan Transaction, the Yellowstone
Club carried approximately $19 to $20 million in debt on its books, consisting of a combination
of a revolving line of credit and a term loan with American Bank. The majority of this debt was
related to the construction of the Warren Miller Lodge, which was already underway.
The Debtors had also experienced negative cash flows in several of the years leading up
to the Credit Agreement with Credit Suisse. Several of the witnesses made reference to
EDITDA, which is earnings before interest, taxes, depreciation and amortization. Kent Mordy4
(“Mordy”), a certified public accountant and a certified insolvency and reorganization advisor,
510(c). This Court's decision to grant the Debtors and the Committee equitable relief is
reviewed for an abuse of discretion. See Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d
1154, 1163 (9th Cir.2001).
In the Ninth Circuit:
The subordination of claims based on equitable considerations generallyrequires three findings: “(1) that the claimant engaged in some type of inequitableconduct, (2) that the misconduct injured creditors or conferred unfair advantageon the claimant, and (3) that subordination would not be inconsistent with theBankruptcy Code.” Feder v. Lazar (In re Lazar), 83 F.3d 306, 309 (9th Cir.1996)(citing Benjamin v. Diamond (In re Mobile Steel Co.), 563 F.2d 692, 699-700 (5thCir.1977)).
In re First Alliance Mortg. Co., 497 F.3d 977, 1006 (9 Cir. 2006). When the remedy ofth
equitable subordination involves a non-insider, non-fiduciary, “the level of pleading and proof
is elevated: gross and egregious conduct will be required before a court [can] equitably
subordinate a claim.” Id.
The court in Waslow v. MNC Commercial Corp. (In re Paolella & Sons, Inc.), 161 B.R.
107, 119 (E.D. Pa. 1993), recognized that equitable subordination is seldom used in a non-
insider, non-fiduciary scenario because,
[a]s Judge Easterbrook pointed out in Kham & Nate's Shoes No. 2, Inc. v. FirstBank, 908 F.2d 1351, 1356 (7th Cir.1990), “[c]ases subordinating the claims ofcreditors that dealt at arm's length with the debtor are few and far between.” Thedearth of cases subordinating the claims of non-insiders is readily explained by thehigh threshold of misconduct that must be established by the objectant innon-insider cases. In In re Osborne, 42 B.R. 988, 996 (W.D.Wis.1984), the courtdiscussed the conduct required for equitable subordination in non-insider cases:
[The degree of misconduct] has been variously described as “verysubstantial” misconduct involving “moral turpitude or some breach of dutyor some misrepresentation whereby other creditors were deceived to theirdamage” or as gross misconduct amounting to fraud, overreaching orspoliation.
Accord In re Mayo, 112 B.R. 607, 650 (Bankr.D.Vt.1990) (“There are few casesin which gross misconduct has actually been applied to non-insiders, and evenfewer where inequitable misconduct has caused a claim to be subordinated.”); Inre Dry Wall Supply, Inc., 111 B.R. 933, 938 (D.Colo.1990) (noting that “when[the fiduciary] relationship is absent, the party seeking equitable subordination ofa claim must demonstrate even more egregious conduct by the creditor”).Although courts have struggled to articulate the misconduct that must beestablished to subordinate non-insider claims, it is clear that the non-insider'smisconduct must be “gross or egregious.” See Benjamin Weintraub & Alan N.Resnick, BANKRUPTCY LAW MANUAL ¶ 5.15 at 5-96 (3d ed. 1992); see also In reOsborne, 42 B.R. at 997 (stating that “plaintiffs are required to make a showing ofgross or egregious misconduct”). Thus, “[a] mere statement that the creditor isguilty of ‘inequitable conduct’ will not suffice.” In re W.T. Grant, 4 B.R. 53,75-76 (Bankr.S.D.N.Y.1980), aff'd, 699 F.2d 599 (2d Cir.1983). Rather, theplaintiff must prove gross misconduct tantamount to “fraud, overreaching orspoliation.” Id.; see also In re Fabricators, Inc., 926 F.2d 1458, 1465 (5thCir.1991) (“If a claimant is not an insider, then evidence of more egregiousconduct such as fraud, spoliation or overreaching is necessary.”); In re Dry WallSupply, Inc., 111 B.R. 933, 938 (D.Colo.1990) (“The degree of misconduct whichthe plaintiff must show in the case of a noninsider has been variously described asgross misconduct tantamount to fraud, misrepresentation, overreaching orspoliation.”); In re Teltronics, 29 B.R. at 173 (holding that “it is incumbent uponthe [objectant] to demonstrate that [the non-insider] engaged in very substantialmisconduct tantamount to fraud, overreaching or spoliation, which caused othercreditors of [the debtor] to suffer damages”); In re Pinetree Partners, Ltd., 87B.R. 481, 488 (Bankr.N.D.Ohio 1988) (“Where the claimant is a non-insider,egregious conduct must be proven with particularity. It is insufficient for theobjectant in such cases merely to establish sharp dealings; rather, he must provethat the claimant is guilty of gross misconduct tantamount to fraud, overreachingor spoliation to the detriment of others.”). In summary, the “gross or egregiousmisconduct” needed to subordinate claims of non-insiders is much greater thanthe “inequitable conduct” that warrants subordination of insiders and fiduciaries.
Credit Suisse's actions in the case were so far overreaching and self-serving that they shocked
the conscience of the Court.
In Cushman & Wakefield's July 1, 2005, appraisal, the Debtors had purportedly sold
243 lots or units, and another 42 lots were listed under contract. The lot sales for 2000 through
2005 are summarized by closing date, lot number, price and type in Addendum B to the
John S. Hekman EXHIBIT 1 550 South Hope Street Suite 2150 Los Angeles, California 90071 Tel. (424) 204-8872 Fax (213) 243-3710 E-mail: [email protected] EDUCATION Ph.D., Economics, University of Chicago M.B.A., Finance, University of Chicago BA, History, Valparaiso University EMPLOYMENT Principal, LECG, LLC, 2004-present.
Lecturer, MBA program, University of Southern California, 1989-present. Department of Finance and Business Economics.
Past Positions:
Principal, Economic Analysis LLC, 2000-03.
Principal, LECG, LLC, 1998-2000.
Director, Altschuler, Melvoin and Glasser LLP, 1996-98.
Vice President (1993-96), Senior Economist (1992), Economic Analysis Corporation.
Senior Economist, Micronomics, Inc., 1990-92.
Executive Vice President and Director of U.S. Economic Forecasting, Claremont Economics Institute, 1986-90. Editor, The Main Street Journal Investment letter.
Associate Professor of Finance, University of North Carolina, Chapel Hill 1981-86, (academic tenure granted, 1985).
Visiting Scholar, Federal Reserve Bank of Atlanta, 1981-84.
Economist, Federal Reserve Bank of Boston, 1980.
Research Associate, Harvard-MIT Joint Center For Urban Studies, 1978.
4/1/2009 www.lecg.com Page 1 of 8
Assistant Professor of Economics, Boston College, 1975-81.
Instructor, University of Chicago, 1974-75.
TESTIMONY
Morton v. Morton. California Superior Court for the County of Los Angeles. Retained by Thomas Nolan of Skadden, Arps, Meagher & Flom. Deposition March 2009. Bullock v. Philip Morris, Inc. California Superior Court for the County of Los Angeles. Retained by Robert McCarter of Arnold & Porter. Deposition March 2009. Gartner, Inc. v. Parikh, et al. United States District Court for the Central District of California. Retained by Thomas Mackey of Jackson Lewis, August 2008. Deposition October, 2008. Beth Robbins v. Essex Management Corp., et al. California Superior Court for the County of Los Angeles. Retained by Jeremy Dwork of Daley & Heft. Deposition September, 2008. Catherine Blaylock, et al. v. First American Title Insurance Company. United States District Court, Western District of Washington. Retained by Stephen Rummage of Davis Wright Tremaine. Declaration filed January, 2008. Janice Howland v. First American Title Insurance. United States District Court, Northern District of Illinois, Eastern Division. Retained by Douglas Mansfield of Jones, Day. Declaration filed January, 2008. United National Maintenance Inc. v. San Diego Convention Center Corp. California Superior Court, County of San Diego. Retained by Jeffrey Leon of Ungaretti & Harris, LLP. Testimony filed December 2007. Julius Chang and Howard Chen v. Charles Schwab & Company, California Superior Court, County of San Francisco. Retained by Daniel Newland of Seyfarth Shaw LLP. Deposition October, 2007.
Eric Seiken, et al. v. Pearle Vision, Inc., et al. California Superior Court, County of San Diego. Retained by Kevin Quinn of Thorsnes Bartolatta McGuire. Class Certification Declaration submitted September, 2007; deposition November 2007. Tim Wood, SFG Financial Corp. et al. v. Mark Boucher, Investment Research Associates, et al, California Superior Court, County of San Mateo. Retained by Joel Wolosky of Hodgson Russ. Deposition April 2007.
4/1/2009 www.lecg.com Page 2 of 8
Dwight W. Crawford. v. Debra S. Katz, et al., Superior Court for the District of Columbia. Retained by Glenn M. Young of the Young Law Firm. Deposition April 2007. James Ripley v. Wyoming Medical Center et al. United States District Court for the District of Wyoming. Retained by Stephen Kline of Kline Law Office PC. Deposition April 2007. American Medical Response v. City of Stockton United States District Court Eastern District of California. Retained by Michael Higgins of Wulfsberg Reese Colvig & Firstman. Deposition February 2007. Breakdown Services Ltd. v. Now Casting, Inc. California Superior Court, County of Los Angeles. Retained by Stephen P. Krakowsky. Deposition October 2006. RitterRanch Development LLC, debtor. Los Angeles County Waterworks District No. 40 v. Robbin Itkin et al., United States District Court Central District of California. Retained by Parry Cameron of Stephan, Oringher, Richman, Theodora & Miller. Deposition June 2006. Pamela Cunningham and Reet Caldwell v. Mattel, Inc. Circuit Court, Third Judicial Circuit, Madison County, Illinois. Retained by Gerald Hawxhurst of Quinn Emanuel Urquhart Oliver & Hedges. Deposition February 2005. In re Cioffi, California Superior Court, County of Santa Clara. Retained by William Russell of Lakin, Spears. Deposition and trial testimony January 2004. Ederel Sport, Inc. v. Gotcha International, L.P. U.S. Bankruptcy Court, Central District of California. Retained by Michael Adele of Albert, Weiland & Golden. Deposition and trial testimony May 2003. In Re Fuqua Industries Shareholder Litigation, Delaware Chancery Court Civil Action No. 11974. Retained by Lowell Sachnoff of Sachnoff & Weaver. Deposition March 2003. SPC/PomomaLLC v. Medianews Group, Inc. Superior Court of California, County of Los Angeles. Retained by Steven Gardner of Cohon and Gardner. Deposition February 2003; trial testimony April 2003. MGM v. Midway Games, Inc. U. S. District Court, Central District of California, Western Division. Retained by John Williams of Lord, Bissell & Brook. Report submitted October 2002. Freeman Industries LLC v. Eastman Chemical Company, et al., In the Law Court for Sullivan County at Kingsport, Tennessee. Retained by Aton Arbisser of Kaye Scholer. Class Certification Affidavit submitted September 2002.
Keep v. State of California, Superior Court of California, County of Los Angeles. Retained by Vladimir Shalkovich, Deputy Attorney General. Deposition October 2002.
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IMAX, LTD. v. Krikorian Premiere Theatres, U.S. District Court for the Central District of California. Retained by Glenn Dassoff of Paul, Hastings, Janofsky & Walker. Deposition September 2002.
Betty Bullock v. Phillip Morris, Inc. et al.; California Superior Court, Los Angeles. Retained by Thomas Stoever of Arnold & Porter on behalf of defendant. Deposition May 2002.
International Paper and Masonite v. Affiliated FM Insurance Co, et al.; California Superior Court, San Francisco. Retained by Adam Murray of Howrey, Simon, Arnold & White. Deposition May 2001; trial testimony November 2001.
Copley Press, et al. v. Gray Davis, et al; Tony Strickland, et al. v. Gray Davis, et al.; California Superior Court, San Diego County; retained by Timothy Muscat, Deputy Attorney General. Declaration in Support of Defendant's Opposition Brief submitted May 2001.
Fitzgerald v. Silcott, et al. California Superior Court, County of Los Angeles. Retained by Law Offices of J. Jeffrey Long. Deposition January 2000; trial October 2001.
Formal Complaint of Tesoro Alaska Petroleum Against Amerada Hess, et al., Federal Energy Regulatory Commission and Regulatory Commission of Alaska. Retained by John Donovan of Skadden, Arps, Slate Meagher & Flom. Testimony submitted November 2000.
Alavi v. Kaiser Foundation Hospitals. Retained by Walter Weiss. Arbitration testimony November 2000.
Seguritan v. State of California, et al. Los Angeles County Superior Court. Retained by Anne Hunter, Deputy Attorney General. Deposition July 2000.
Lenehan v. Maryland Casualty. California Superior Court, County of Los Angeles. Retained by Law Offices of J. Jeffrey Long. Deposition May 2000.
Hearing on Green Coke Pricing Issue for TAPS Quality Bank. Federal Energy Regulatory Commission. Retained by John Donovan of Skadden, Arps, Slate, Meagher & Flom. Testimony May 2000.
Tash v. Aviara Land Associates, L.P., et al. San Diego Superior Court. Retained by Jerry Phillips of Richman, Mann, Chizever, Phillips & Duboff. Deposition April 2000; Trial testimony May 2000.
First Pension Corp/Murray v. Belka. California Superior Court, County of Orange. Retained by William Meeske of Latham & Watkins. Deposition February 2000.
Rhonda Jalali v. Assembly of God, Teen Challenge et al. California Superior Court. Retained by George Buehler of Howrey & Simon. Deposition and trial testimony July 1999.
4/1/2009 www.lecg.com Page 4 of 8
Alfred Martino, Jr. v. Northbrook Property and Casualty Company and St. Paul Fire and Marine Insurance Company, Arbitration. Retained by Law Offices of J. Jeffrey Long. Testimony June 1999.
Hugo Valdivia v. MCE Corporation, et al., California Superior Court for the County of Los Angeles. Retained by Andrew Jacobs of the Law Offices of Andrew Hoffman (CNA Insurance). Deposition November 1997; trial January 1998.
Louisville Bedding Company v. Pillowtex Corporation, United States District Court for the Western District of Kentucky. Retained by Hartwell Morse of Welsh & Katz. Deposition November, December 1997.
Infant and Nutritional Products, et al. v. BJ Family Food Center, et al, California Superior Court for the County of Los Angeles. Retained by Farhad Novian of Novian & Novian. Deposition September 1997.
William Gene Norman v. Herbalife International, et al., California Superior Court for the County of Los Angeles. Retained by Ward Benshoof of McClintock Weston Benshoof Rochefort Rubalcava MacCuish. Deposition April 1997.
Jeffrey Alpert v. Gerald Busch, et al, California Superior Court for the county of Los Angeles. Retained by Law Offices of Daniel Hoffman (CNA Insurance). Trial testimony November 1997.
Janelle Flores v. Dapo Popoola, MD, et al., California Superior Court for the County of Los Angeles. Retained by Henry Tovmassian of Kehr, Crook, Tovmassian & Fox. Deposition September 1997.
Ridgecrest Homeowners Association v. Nihon Lancre America, Inc., et al., California Superior Court for the County of Los Angeles. Retained by Ronald Caswell of Richmond, Lawrence, Mann, Greene, Chizever, Friedman & Phillips. Deposition June 1997.
Harvey W. Stuart, et al. v. Kraft Foods, Inc. et al., United States District Court for the Eastern District of Wisconsin. Retained by Michael Freed of Much Shelist Freed Denenberg Ament Bell & Rubenstein. Affidavit November 1996; deposition and court testimony December 1996.
Albert and Estelle Binder, et al. v. Thomas Gillespie, et al., United States District Court for the District of Idaho. Retained by Robert Bretz of Robert H. Bretz, PC. Affidavit December 1996.
Ernst Paul Lehmann Patentwerk v. San-Val Discount, Inc., United States District Court, Central District of California. Retained by Douglas Adler of Skadden, Arps, Slate, Meagher & Flom. Affidavit submitted March 1996.
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JAR-PR Associates v. Unocal, Superior Court of the State of California, County of Los Angeles. Retained by George Crook of Kehr, Crook, Tovmassian & Fox. Deposition and trial testimony, March 1996.
Sarkis v. State of California, California Superior Court, County of Kern. Retained by Deputy Attorney General Daniel Helfat. Deposition, January 1996.
Casper Boso v. Chicago Bears. Retained by Steven Wolf of Wolf & Ouimet to testify regarding the average career length of NFL players. Arbitration testimony November 1994.
Styling Research Company v. Conair Corporation, Superior Court of the State of California, County of Los Angeles. Retained by Phillip Belleville of Latham & Watkins. Deposition August 1992.
Medical Designs, Inc. v. Donjoy, Inc., United States District Court, Southern District of California. Retained by Paul C. Van Slyke of Pravel, Gambrell, Hewitt, Kimball & Krieger. Deposition October 1991.
California Grocers Association v. Bank of America, Superior Court of the State of California for the County of Alameda, Northern District. Retained by Arne Wagner of Bank of America. Deposition May 1991.
CONSULTANT
Simpson Thatcher & Bartlett, New York, NY, Kenneth Logan; Ronald Cleveland, et al. v. Viacom, Blockbuster, et al. United States District Court for the Western District of Texas, 2002. In Re Maguire Thomas Partners – Grand Place Tower, Ltd. United States Bankruptcy Court, Central District of California. Retained by Bennett Silverman of Gibson, Dunn & Crutcher on behalf of Sumitomo Bank, 1999.
Howrey & Simon, Washington, DC, Thomas Heyer; Litton Systems, Inc. v. Honeywell, Inc., 1995-1996.
Thelen, Marrin, Johnson & Bridges, San Francisco, Steven V. O’Neal; IBM v. Fasco Industries, 1994-1995.
Packard Bell Electronics, Inc. v. Teledyne Industries, Inc., Superior Court of the State of California, County of Los Angeles. Retained by Ronald M. St. Marie of Ervin, Cohen & Jessup. August 1995.
O’Melveny & Myers, Los Angeles, Charles Diamond, Randy Oppenheimer; Exxon Valdez Oil Spill Litigation, 1993-1994; 2000; 2002.
4/1/2009 www.lecg.com Page 6 of 8
PUBLICATIONS
“California Under Siege: A Call for Perspective” (with Ken Agid, et al.), California Real Estate Roundtable, April 1991.
“Should We Reform Deposit Insurance?” Los Angeles Times, March 11, 1990, D3.
“New England’s Economy in the 1980s” (with Lynn Browne), in The Massachusetts Miracle, David R. Lampe (ed.), The MIT Press: Cambridge, MA, 1988.
“Real Estate Returns and Inflation” (with David Hartzell and Mike Miles), American Real Estate and Urban Economics Association Journal (AREUEA), Spring 1987.
“Factors Affecting Manufacturing Location in North Carolina,” in Dale Whittington (ed.), High Hopes for High Tech: Microelectronics in North Carolina, University of North Carolina Press, 1987.
“Diversification Categories in Investment Real Estate” (with David Hartzell and Mike Miles), AREUEA Journal, Summer 1986.
Land Supply Monitoring: A Guide for Improving Public and Private Urban Development Decisions (with D. Godshalk, S. Bollens, and M. Miles), Oelgeschlager, Gunn & Hain: Boston, 1985.
“Rental Price Adjustment and Investment in the Office Construction Market,” AREUEA Journal, Spring 1985.
“Branch Plant Location and the Product Cycle in Computer Manufacturing,” Journal of Economics and Business, May 1985.
“Venture Capital and Economic Development in the Southeast” (with Mike Miles), Economic Review, Federal Reserve Bank of Atlanta, July 1983.
“Optimal Allocation of Economic Development Funds” (with Mike Miles, et al.), N.C. Department of Natural Resources and Community Development, January 1983.
“What are Businesses Looking for? A Survey of Industrial Firms in the South,” Economic Review, Federal Reserve Bank of Atlanta, June 1982.
“Behind the Sunbelt’s Growth: Industrial Decentralization” (with Alan Smith), Economic Review, Federal Reserve Bank of Atlanta, March 1982.
“Impact of Environmental Regulations on Industrial Development in North Carolina” (with Raymond Burby, et al.), North Carolina Department of Natural Resources and Community Development, February 1982.
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4/1/2009 www.lecg.com Page 8 of 8
“The Evolution of New England Industry” (with John Strong), New England Economic Review, March-April 1981.
“New England’s Economy in the 1980s” (with Lynn Browne), New England Economic Review, January-February 1981.
“Income, Labor Supply and Urban Residence,” American Economic Review, September 1980.
“Is there a Case for Plant Closing Laws?” (with John Strong), New England Economic Review, July-August 1980.
“The Product Cycle and New England Textiles,” Quarterly Journal of Economics, June 1980.
“Can New England Hold Onto its High Technology Industry?” New England Economic Review, April 1980.
“Regions Don’t Grow Old, Products Do,” The New York Times, Sunday Business, November 4, 1979.
“What Attracts Industry to New England?” New England Economic indicators, December 1978.
“An Analysis of the Changing Location of Iron and Steel Production in the Twentieth Century,” American Economic Review, March 1978.
Exhibit 2 Report of John S. Hekman
Exhibit 2
List of Materials Reviewed
1. Complaint: Official Committee of Unsecured Creditors, Plaintiff vs. Credit Suisse, Cayman Islands Branch, et al., in the United States Bankruptcy Court for the District of Montana, March 3, 2009.
2. Committee’s Answers to Credit Suisse’s Interrogatories.
3. Credit Suisse Cayman Islands LLC Credit Agreement with Yellowstone Mountain Club, et al., September 30, 2005 (RKM000389-483); GLR000434-39; Exhibits: GLR000676-809; Schedules GLR000840-869; Security Agreement GLR000881-919.
4. Yellowstone Mountain Club Appraisal, August 2005, by Cushman & Wakefield of
Colorado, Inc., transmittal letter (CSVC00002975-3092)
5. “Paradise Lost”, Fortune, February 6, 2008.
6. Yellowstone Mountain Club Appraisal by Cushman & Wakefield, September 2004 (CSVC00000332-393).
7. Cushman & Wakefield of Oregon, Inc. Appraisal June 2006 (RKM000267-325)
8. November 10, 2008 Appraisal of Yellowstone Club (YUCC2023040-2023145)
10. Loan amount and term sheet drafts and related emails: CSVC00000001-07; CSVC00000013-19; CSVC00000152; 156-161.
11. Engagement letter drafts and related emails: CSVC00000473-476; CSVC00000139.
12. Internal memorandum to “Bank and High Yield Finance Committee” of Credit Suisse First Boston from Jeff Barcy, Jeff Tuckel, Jeremy Rogers and Akira Okubo dated January 6, 2005 (CSVC00110291-98)
13. “Credit Suisse Resort Loans Default From Beverly Hills to Idaho” www.bloomberg.com, March 5, 2009
14. Yellowstone Mountain Club and Yellowstone Development Financial Statements, 2001 (CSVC00000234-251); 2002 (CSVC00000252-269); 2003 (CSVC00000270-288); 2004 (CSVC00000289-306); 2007 (KPMG).
15. Yellowstone Mountain Club, LLC and Subsidiary, Yellowstone Development, LLC and subsidiaries and Big Sky Ridge, LLC Combined Financial Statements, December 31, 2006 and 2005 (RKM000135-173).
16. Yellowstone Mountain Club Lot sales data (Excel sheet).
17. Engagement letter May 2, 2005, from Cushman & Wakefield of Colorado, Inc. to Mr. Jeff Barcy, Credit Suisse First Boston LLC, re: appraisal of Yellowstone Club, Madison County, Montana (CVSC00000116-120)
18. Private rating letter, Moody’s Investor’s Service (CSVC00017353-55)
19. Private rating letter, Standard & Poor’s to Chris Campbell, Vice President of Finance,
1
Exhibit 2 Report of John S. Hekman
2
Yellowstone Club, rating $375 million Senior Secured First Lien Credit Facility, dated September 27, 2005 (CVSC00015551-15555)
20. Confidential Information Memorandum re: $330,000,000 Senior Secured Credit Facility for Yellowstone Mountain Club, LLC, prepared by Credit Suisse First Boston, dated September 2005. (CSSU00090-140)
22. “Up to $230.0 Million Senior Secured Credit Facility Engagement Letter” by and between Credit Suisse First Boston and Yellowstone Mountain Club LLC and Yellowstone Development LLC dated May 6, 2005. (CSSU 00001- CSSU00014)
23. “Yellowstone Club $330,000,000 Senior Secured Credit Facility”, prepared by Syndicated Loan Group. (CSVC00041548)
24. “Project Powder” analysis CSVC00000177-206.
Official Committee of Unsecured Creditors v. Credit Suisse Cayman Islands Branch
EXHIBIT 3YELLOWSTONE CLUB APPRAISAL2006 CUSHMAN AND WAKEFIELD
TOTAL NET VALUE INDICATION $1,165,337,695Rounded to $1,165,000,000
AssumptionsTotal # Lots/Units 513 $2,270,955 per unit/lot (513)Total Retail value of Lots $976,750,000Total Retail Value of Club Memberships $310,675,000Expense Inflation 3%Lot/Unit Appreciation 3%
2006 Average Assumed Price per Lot $2,628,048.78
Source: August 2005 Appraisal, Cushman & Wakefield, CW1432; and LECG calculations
Prepared by LECG
Official Committee of Unsecured Creditorsv. Credit Suisse Cayman Islands Branch
EXHIBIT 7YMC AND YD OPERATING INCOME
2001-2004
Report of John S. Hekman
Operating Income (Loss)
YellowstoneYellowstone MountainDevelopment Club Total
NET PRESENT VALUE FACTOR: 15% 1 0.869565 0.756144 0.657516 0.571753 0.497177 0.432328
NET PRESENT VALUE $39,219,934 $49,365,706 $86,955,933 $85,713,916 $79,932,369 $71,971,159 $83,607,869 $496,766,886
AssumptionsTotal # Lots/Units 513Total Retail value of Lots $692,863,052Total Retail Value of Club Memberships $310,675,000Expense Inflation 3%Lot/Unit Appreciation 0%
Source: August 2005 Appraisal by Cushman & WakefieldCW1432 adjusted by LECG
Prepared by LECG
Official Committee of Unsecured Creditorsv. Credit Suisse Cayman Islands Branch
NET PRESENT VALUE FACTOR: 15% 1 0.869565 0.756144 0.657516 0.571753 0.497177 0.432328 0.375937 0.326902 0.284262
NET PRESENT VALUE $56,427,475 $42,312,688 $52,854,980 $58,974,348 $58,424,973 $53,269,076 $76,095,498 $24,520,804 $22,074,312 $10,383,407 $455,337,559.89
AssumptionsTotal # Lots/Units 513Total Retail value of Lots $692,863,052Total Retail Value of Club Memberships $310,675,000Expense Inflation 3%Lot/Unit Appreciation 0%
Source: August 2005 Appraisal by Cushman & WakefieldCW1432 adjusted by LECG
Prepared by LECG
Official Committee of Unsecured Creditorsv. Credit Suisse Cayman Islands Branch
Net Present Value Factor @ 15% 1 0.8696 0.7561 0.6575 0.5718 0.4972 0.4323 0.3759 0.3269 0.2843 0.2472Present Value of Cash Flows $86,677,728 $60,957,499 $60,907,498 $62,476,301 $61,680,970 $56,925,357 $78,935,916 $26,409,292 $23,716,476 $21,066,663 $13,656,934 $553,410,633
AssumptionsTotal # Lots/Units 513Total Retail value of Lots $899,564,468Total Retail Value of Club Memberships $310,675,000Expense Inflation 3%Lot/Unit Appreciation 0%
Source: August 2005 Appraisal by Cushman & WakefieldCW1432 adjusted by LECG
Prepared by LECG
In re YMC, LLC Chapter 11 # 08-61570 Official Committee v. Credit Suisse, AP 09-___ Complaint Page 1 of 25
J. THOMAS BECKETT (UTAH #5587) DAVID P. BILLINGS (UTAH #11510) PARSONS BEHLE & LATIMER Admitted Pro Hac Vice (Docket # 156) One Utah Center 201 South Main Street, Suite 1800 Salt Lake City, UT 84111 Telephone: (801) 532-1234 Facsimile: (801) 536-6111 Email: [email protected][email protected] Counsel to the Official Committee
JAMES H. COSSITT (MONT. # 4773) JAMES H. COSSITT, PC 40 – 2nd East Suite 202 Kalispell, MT 59901-6112 Telephone: (406) 752-5616 Email: [email protected]
IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MONTANA
In re: YELLOWSTONE MOUNTAIN CLUB, LLC, et al., Debtors.
Case No. 08-61570-11-RBK Jointly Administered with 08-61571, 08-61572, and08-61573 Chapter 11
OFFICIAL COMMITTEE OF UNSECURED CREDITORS,
Plaintiff,
vs.
CREDIT SUISSE, CAYMAN ISLANDS BRANCH, and JOHN DOES 1-15,
Defendants.
COMPLAINT
(AIDING AND ABETTING BREACH OF FIDUCIARY DUTY, AVOIDANCE
OF FRAUDULENT TRANSFER, DISALLOWANCE OF CLAIMS, SUBORDINATION OF CLAIMS,
In re YMC, LLC Chapter 11 # 08-61570 Official Committee v. Credit Suisse, AP 09-___ Complaint Page 4 of 25
12. The inevitable failure of this loan drove the Yellowstone Club into bankruptcy.
That failure inflicted substantial harm on the Club’s unwitting members and unsecured creditors.
13. This lawsuit invokes the statutory and common laws of the United States and the
States of Montana and New York and seeks:
a. A judgment of this Court that Credit Suisse knowingly aided and abetted a breach of fiduciary duties by the Blixseths. To remedy that injustice, Credit Suisse must be held to account for the damages suffered by the Blixseths’ breach, or the loan documents must be reformed to reflect the original and actual intent of the parties: that Credit Suisse made a substantial loan to the Blixseths and a much smaller loan to the Yellowstone Club.
b. In the alternative, a judgment by this Court that the loan was a fraudulent transfer that must be avoided to return those involved or effected to their original positions, with all the legal consequences that that entails.
14. This lawsuit seeks redress for the substantial damages suffered by the unwitting
unsecured creditors of the Yellowstone Club who were harmed by this loan transaction,
including hundreds of trade vendors who have not been paid for goods and services they
provided to the Yellowstone Club, and including the Club’s other owners and members whose
interests, membership deposits and real estate investments are now unnecessarily at grave risk.
PARTIES
15. The Committee is the plaintiff.
16. Pursuant to section 1102 of the United States Bankruptcy Code, 11 U.S.C. §§ 101,
et seq. (the “Bankruptcy Code”), the Committee is the statutory representative of the unsecured
In re YMC, LLC Chapter 11 # 08-61570 Official Committee v. Credit Suisse, AP 09-___ Complaint Page 10 of 25
i. $1,515,250 payoff to American Bank for unknown purposes.
j. $896,423.28 payoff to American Bank for unknown purposes.
k. $977,894.92 payoff to American Bank for unknown purposes.
l. $100,000,000 certificate of deposit at U.S. Bank in the Blixseths’ name, from which $28,000,000 was used to purchase a private island in Turks and Caicos.
m. $5,000,000 certificate of deposit at Pacific Western Bank in the Blixseths’ name.
n. $2,971,443.02 payoff of a personal note to Pacific Western Bank.
o. $160,765.83 payoff to Union Bank for a rental home owned by Blixseth.
p. $175,376.23 payoff to Union Bank for a rental home owned by Blixseth.
q. $2,007,930.55 payoff to Commercial Bank for unrelated purposes.
r. $1,403,547 payoff to GECC for an airplane owned by a Blixseth owned company in which neither Yellowstone Mountain Club nor Yellowstone Development have an interest.
s. $2,484,774 payoff to GECC for an airplane owned by a Blixseth owned company in which neither Yellowstone Mountain Club nor Yellowstone Development have an interest.
t. $272,590 payoff to World Savings for a rental home owned by the Blixseths.
45. In respect of the funds disbursed pursuant to paragraph 2.6(i) of the Credit Agree-
ment, and although it received little benefit therefrom, BGI executed an unsecured demand note
(dated as of September 30, 2005, but prepared months thereafter) (the “First BGI Note”) in favor
of YMC in the amount of $208,831,158.45.
46. It has been alleged that BGI has made up to $90 million of interest and principal
reduction payments to YMC in respect of the First BGI Note. The Committee has not at this
time been able to verify whether these amounts were in fact paid or credited.
In re YMC, LLC Chapter 11 # 08-61570 Official Committee v. Credit Suisse, AP 09-___ Complaint Page 18 of 25
90. As the owners of YMC, YD and BSR, the Blixseths owed fiduciary duties to
YMC, YD BSR, the minority owners of those entities, and the Club and its members, to protect
their interests in connection with the Loan Transaction.
91. The Blixseths breached those duties in connection with the Loan Transaction by
abandoning the Yellowstone Club and allowing it to be effectively unrepresented in the
negotiations leading up to the Loan Transaction, and by allowing it to participate in that
transaction, which benefited only the Blixseths and Credit Suisse.
92. Credit Suisse induced the Blixseths to breach their fiduciary duties.
93. Credit Suisse knowingly participated in the Blixseth’s breach of fiduciary duty by
encouraging and affirmatively assisting the Blixseth’s breach of that duty.
94. Credit Suisse helped the Blixseths conceal their breach of fiduciary duty from
YMC, YD, BSR, the minority owners of those entities and the Club’s members and other
unsecured creditors.
95. The Credit Agreement should and must be reformed to reflect the actual intent of
the parties and actual consequences of the Loan Transaction. To wit,
a. Credit Suisse made a loan of between $67,343,841.53 and $166,168,841.55 to YMC, YD and BSR; and
b. Credit Suisse made a loan of between $208,831,158.55 and $307,656,158.53 to the Blixseths, and that loan is secured by the First BGI Note, which Credit Suisse and/or its loan participants may seek recovery on.
96. The Debtors have made $68 million of principal payments pursuant to the Loan
In re YMC, LLC Chapter 11 # 08-61570 Official Committee v. Credit Suisse, AP 09-___ Complaint Page 23 of 25
121. Consequently, until the Committee’s contentions herein are resolved, such proper-
ties may be sold free and clear of Credit Suisse’s purported mortgages, liens and security
interests pursuant to section 363(f)(4) of the Bankruptcy Code, and Credit Suisse may not be
allowed to credit bid at any such sale.
122. Furthermore, Credit Suisse, and the loan participants for whom it acts as agent,
may be disallowed from making any election under section 1111(b) of the Bankruptcy Code or
credit bidding at any sale conducted pursuant to sections 363 or 1123 of the Bankruptcy Code.
EIGHTH CAUSE OF ACTION
(Against all Defendants)
Attorneys Fees
123. The Committee incorporates by reference all the prior allegations of this
Complaint.
124. To the extent allowed by any of the applicable contracts, or otherwise by law, the
Committee is entitled to recover its attorneys fees from the defendants.
PRAYER FOR RELIEF
WHEREFORE, the Committee prays for the following judgments against Credit Suisse
and John Does 1-15:
1. That Credit Suisse aided and abetted the Blixseths in a breach of their fiduciary duties and must account for the damages suffered thereby;
2. That the Loan Transaction be reformed to reflect the parties’ actual origi-nal intent: that Credit Suisse made (i) a relatively small loan to the Debtors that has been paid down substantially or paid off in full, and (ii) a substantially larger loan to BGI and/or the Blixseths, secured by the First BGI Note, or else Credit Suisse must be held to account for the damages suffered;
In re YMC, LLC Chapter 11 # 08-61570 Official Committee v. Credit Suisse, AP 09-___ Complaint Page 24 of 25
3. That, if the Loan Transaction is so reformed, Credit Suisse must turn over to the Debtors’ estates the amount that the Debtors have overpaid in interest charges, plus interest;
4. That the Court declare that the Debtors did not receive reasonably equiva-lent value in connection with the Loan Transaction;
5. That the Loan Transaction be annulled, terminated, avoided and unwound, as having been a fraudulent transfer;
6. That Credit Suisse be required to release all its mortgages, liens and secu-rity interests in the Debtors’ properties to the extent obtained in connection with the Loan Transaction;
7. That Credit Suisse be required to turn over to the Debtors the $146.4 million it received from the Debtors in connection with the Loan Transaction;
8. That the Court declare that Credit Suisse’s bankruptcy claims shall be disallowed pending its release of such mortgages and security interests, and its return of approximately $146.4 million in cash to the Debtors;
9. That the Court declare that Credit Suisse’s bankruptcy claims, if and when allowed, shall be equitably subordinated to the claims of the Debtors’ general unsecured creditors;
10. That the Court declare that, by virtue of this lawsuit, Credit Suisse’s purported claims against and interests in the Debtors’ properties are in bona fide dispute;
11. For interest, costs, and attorneys’ fees; and
12. For such other and further relief as the Court deems just or as warranted by Rule 7054(c) of the Federal Rules of Bankruptcy Procedure.
DATED this 3rd day of March, 2009.
PARSONS BEHLE & LATIMER __/s/ J. Thomas Beckett ________ J. Thomas Beckett David P. Billings 201 S. Main Street, Suite 1800 Salt Lake City, Utah 84111
In re YMC, LLC Chapter 11 # 08-61570 Official Committee v. Credit Suisse, AP 09-___ Complaint Page 25 of 25
JAMES H. COSSITT, PC __/s/ James H. Cossitt _________ James H. Cossitt
40 – 2nd East Suite 202 Kalispell, MT 59901-6112 Attorneys for the Official Committee Plaintiff’s Address: Official Committee of Unsecured Creditors c/o J. Thomas Beckett Parsons Behle & Latimer 201 South Main St. Suite 1800 Salt Lake City Utah 84111 L:\Clients\YMC\FT Lawsuit\09 03 03 Final from Beckett.doc