By Patrick Fitzgerald
The former owners of Lake Las Vegas, including two of Texas'
billionaire Bass brothers, paid $115 million last month to quietly
settle a long-running lawsuit tied to the luxurious golf community
and resort's collapse into bankruptcy in 2008, according to
confidential settlements viewed by The Wall Street Journal.
The lawsuit was brought by Larry Lattig, a court-appointed
bankruptcy trustee, who sued the initial backers of Lake Las Vegas
for the $470 million they took out of the project--a 3,600-acre
resort community centered on a man-made lake about 20 miles from
the Las Vegas Strip--before it tumbled into bankruptcy.
The ex-owners--billionaire brothers Sid and Lee Bass and the
estate of the late California developer Ron Boeddeker--were able to
cash out of their investments in the resort community, due to a
syndicated loan arranged by Credit Suisse Group.
The Credit Suisse loan was similar to a home-equity loan,
allowing the resort's backers to cash out their investments. The
Swiss bank later marketed similar loans to a number of other owners
of western luxury resorts--including Yellowstone Club in Montana,
the Promontory Club in Utah and the Tamarack Resort in Idaho--that
eventually ended up going bust when property values cratered.
Lake Las Vegas had three golf courses, two luxury hotels, a
casino and a lake in the middle of the Nevada desert. It filed for
bankruptcy in 2008 in the midst of the nation's housing market
collapse. By that time, Mr. Boeddeker and the Bass brothers had
given up their ownership stakes after defaulting on another loan
from a group of Credit Suisse-led lenders.
Two years later the project emerged from Chapter 11, and Mr.
Lattig sued the Basses, Mr. Boeddeker's estate and a company owned
by Bill Hallman, a longtime Bass family attorney. The suit looked
to recover the money the ex-owners had taken out of the project via
the Credit Suisse loan. Bankruptcy law allows a trustee to seek to
unwind so-called fraudulent transactions within two years of a
bankruptcy filing if they provided no benefit to the business.
The Lake Las Vegas suit, which had been working its way through
federal court, was settled earlier this year but its terms had
remained under wraps. Representatives for the Basses, the
Boeddekers and Messrs. Hallman and Lattig didn't respond to
requests for comment.
Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com
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