03/13/2008

By REBECCA BOONE  / Associated Press

Major investment bank Credit Suisse is suing Tamarack Resort, contending the resort defaulted on a $250 million loan.

In a lawsuit filed Tuesday in 4th District Court, Credit Suisse asks a judge to allow it to foreclose on the resort property near Donnelly and collect the more than $260 million it is currently owed for the unpaid loan and interest.

The lawsuit was the latest financial blow to the central Idaho ski resort. The resort's two major investors, Cross Atlantic Real Estate and VPG Investments, filed for bankruptcy protection last month in federal court. At the time, Cross Atlantic owner Jean-Pierre Boespflug said the move was necessary to protect assets from Credit Suisse.

On Wednesday, Boespflug said in a statement that the Credit Suisse filing "was anticipated by resort management as a normal exercise of remedies.

"Tamarack is focused on raising new financing and is hopeful that the process is following a positive course," his statement added. "Judicial foreclosure takes time, which is exactly what Tamarack needs. This time will allow Tamarack to either refinance, add a partner with additional financing or sell the resort to a suitable buyer capable of managing the asset with the continued interest of the community in mind."

Alfredo Miguel Afif, the owner of VPG Investments, did not immediately respond to a request for comment left with his lawyer.

According to the lawsuit, Tamarack Resort was given the loan in May 2006, with the property on which the resort is located serving as part of the collateral.

The resort failed to make a payment of nearly $5 million due at the end of 2007, the lawsuit alleged. Several extensions were granted, according to the lawsuit, but resort officials still failed to pay and so Credit Suisse declared that the entire loan was to be paid by Feb. 20, 2008.

Credit Suisse officials contend that Tamarack has actually been in default since the end of June 2007, partly because the resort company allowed its level of debt to get too high compared to the value of the resort property — a lending term called the loan-to-value ratio. The resort also defaulted when it merged several associated companies — including a real estate, retail, video companies and others — without the consent of Credit Suisse, the bank contends. At least nine mechanics' liens have been placed on the resort property, according to the suit, which said those also constitute a default under the loan agreement.

Tamarack Resort opened Dec. 15, 2004, marketing itself to baby boomers with disposable income. At the time, lots on the property were selling for upward of $450,000 and investors were predicting that the resort could become a $1.5 billion project. The resort includes thousands of home and condominium sites, a ski area, a golf course and a marina on nearby Lake Cascade. In 2005 President George Bush stayed at the resort, and by that fall condominium sites were selling for as much as $2.8 million.

The investors' bankruptcy filings came after the French bank Societe Generale withdrew a $118 million construction loan for the resort — money that Boespflug has said Tamarack was counting on to pay part of the Credit Suisse debt.

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Associated Press Writer John Miller in Boise contributed to this report.