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February 12, 2012

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Developers retain high-profile attorney in Lake Las Vegas dispute

By Steve Green (contact)

Thursday, Sept. 9, 2010 | 9:46 a.m.

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Prominent Houston attorney David J. Beck has been retained by two of the billionaire Bass brothers to square off against international financial giant Credit Suisse AG in a $470 million dispute over Lake Las Vegas in Southern Nevada.

Just as the 3,600-acre, 1,600-home Lake Las Vegas community in Henderson emerged from bankruptcy in July, its creditors' trust -- led by Credit Suisse -- sued former Lake Las Vegas developers and insiders charging they had drained the company of equity and doomed it to financial failure.

Key targets of the lawsuit, filed by Dallas attorneys with the law firm McKool Smith, are Texans Lee Bass and Sid Bass as well as Transcontinental Corp. of Santa Barbara, Calif.

At issue is $470 million withdrawn from the company in 2004 as an equity distribution -- money provided by Credit Suisse as part of a $670 million financing package.

The creditors' trust charges this $470 million was a "fraudulent transfer" and wants the money back for the benefit of creditors.

Transcontinental has long argued the $670 million from Credit Suisse was a predatory loan made during the economic boom and that it was Credit Suisse that encouraged the developers to withdraw the $470 million as a return on their investment.

Similar arguments have been made against Credit Suisse following the failure of other high-profile developments around the West financed by the bank during the boom years of the mid 2000s including the Yellowstone Club in Montana. Credit Suisse has denied wrongdoing.

In court papers filed Tuesday, Beck and other defendants' attorneys asked that the Lake Las Vegas lawsuit be moved from the Nevada bankruptcy court to U.S. District Court and they demanded a jury trial. The merits of the case -- or lack thereof -- weren't addressed in this initial response to the lawsuit.

"Movants are entitled to a jury trial on the various legal causes of action asserted against them, including the cause of action for fraudulent conveyance, provided that they have not filed a proof of claim or otherwise consented to bankruptcy court jurisdiction," their filing said. "Movants did not participate in the debtors' bankruptcy case and did not file a proof of claim against any of the debtors."

Beck, along with Joe Redden and Ron Secrest, founded the boutique litigation law firm Beck, Redden & Secrest LLP in January 1992. According to the firm, Beck is an active trial lawyer who has been named by the National Law Journal as one of the top 10 trial lawyers in the United States and one of the top trial lawyers in the Southwest. Also representing the defendants is Beck, Redden & Secrest commercial and intellectual property litigator Matthew Whitley; as well as longtime Las Vegas business attorneys James Pisanelli and Debra Spinelli of the firm Pisanelli Bice PLLC.

Some of the defendants are represented by John O'Reilly and Timothy O'Reilly of O'Reilly Law Group LLC of Las Vegas, which represented Transcontinental and another creditors' trust defendant, Carmel Land & Cattle Co., in the bankruptcy case. That group is also represented by attorneys with the firm Irell and Manella LLP in Newport Beach, Calif., and Los Angeles.

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