Las Vegas, NV: Attorneys representing home buyers in The Cosmopolitan in Las Vegas, filed a law suit seeking class action status, in Clark County this week, alleging that the owners of the condo development misled investors into accepting a settlement of an earlier lawsuit.
The controversial property was acquired by Deutsche Bank and its subsidiary Nevada Property 1 LLC in 2008 from the original developer, who had defaulted on $760 million in loans made by the bank. However, the original developer had promised the units would be ready for occupation by early 2008.
According to the complaint, Deutsche Bank and Nevada Property 1 decided to abandon The Cosmopolitan's condominium component and build a hotel-casino property.
"Once (they) made that material decision, they were legally and contractually obliged to disclose it. (They) instead decided to conceal their decision and use the class actions that were filed by buyers to negotiate a partial refund of plaintiff's deposits, so that they could coerce (them) into forfeiting over $150 million of their and interest to The Cosmopolitan, despite their decision to convert the project to all-hotel," the complaint states.
The complaint further alleges that the owner committed fraud "by negotiating a class action settlement that called for a partial refund ... under the auspice that The Cosmopolitan was proceeding with its construction and conveyance of (the) condominium units, while in reality (they) had no good faith intention or desire to actually" deliver the units. Potential buyers had paid deposits of 20 percent to secure a condominium. In April 2010, the condo developers finalized a $60 million settlement with more than 400 buyers involved in a class action lawsuit.
The complaint accuses the owner of committing fraud "by negotiating a class action settlement that called for a partial refund ... under the auspice that The Cosmopolitan was proceeding with its construction and conveyance of (the) condominium units, while in reality (they) had no good faith intention or desire to actually" deliver the units.
The lawsuit also alleges that about $250 million was paid in deposits to hold the condos. Following the settlement, Deutsche Bank and Nevada Property 1 retained more than $150 million in deposits and interest, according to the lawsuit.
