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11.07.2018 02:49 Age: 2 days

Credit Suisse nears $360 million deadline in fraud suit built on a hunch


CHICAGO (Reuters) - When the high-end property development Lake Las Vegas collapsed during the 2008 financial crisis, 31 funds that helped finance the project lost a total of $540 million. But only one of them, Dallas-based hedge fund Highland Capital Management, aggressively pursued legal action against Credit Suisse Group AG, which arranged the financing and appraisals for the project.

Highland ultimately convinced a Texas court that Credit Suisse had breached its contract and aided and abetted fraud in the deal, and the decision was upheld on appeal. Now, Credit Suisse faces a July 18 court deadline to pay Highland $360 million or appeal to the Texas Supreme Court.

The victories to date have enhanced the reputation of a fledgling Texas law firm, and legal experts say they are likely to encourage other investment funds to take big banks to court.

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Credit Suisse nears $360 million deadline in fraud suit built on a hunch