FILED: NEW YORK COUNTY CLERK 06/16/2014
`NYSCEF DOC. NO. 55
`
`INDEX NO. 652492/2013
`
`RECEIVED NYSCEF: 06/16/2014
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`-against-
`
`
`
`
`
`
`
`
`
`Plaintiffs,
`
`Defendants.
`
`
`
`
`
`
`
`
`
`
`Index No.: 652492/2013
`
`
`
`AFFIDAVIT
`
`Motion Seq. No. 2
`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`-----------------------------------------------------------------------X
`
`CREDIT SUISSE LOAN FUNDING LLC and
`CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
`
`
`
`
`
`HIGHLAND CRUSADER OFFSHORE PARTNERS, L.P.,
`HIGHLAND CDO OPPORTUNITY MASTER FUND,
`L.P., HIGHLAND CREDIT STRATEGIES MASTER
`FUND, L.P., and HIGHLAND CREDIT OPPORTUNITIES
`CDO, L.P.,
`
`
`
`-----------------------------------------------------------------------X
`State of Texas
`
`)
`
`
`
`
`) ss:
`County of Dallas )
`
`
`JAMES DONDERO, being duly sworn, duly deposes and says:
`
`1.
`
`I am the Co-founder and President of Highland Capital Management, L.P. I
`
`submit this Affidavit in opposition to Plaintiffs’ motion for summary judgment.
`
`2.
`
`Highland Capital Management, L.P. is an SEC-registered investment adviser
`
`which, together with our affiliates, has approximately $18.7 billion of assets under management.
`
`We are one of the largest global alternative credit managers. Our firm specializes in various
`
`credit strategies, such as credit hedge funds, long-only funds and separate accounts, distressed
`
`and special situations private equity, and collateralized loan obligations (CLOs). Highland also
`
`offers alternative investments, including emerging markets, long/short equities, and natural
`
`
`NYSCEF DOC. NO. 55
`
`INDEX NO. 652492/2013
`
`RECEIVED NYSCEF: 06/16/2014
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`-against-
`
`
`
`
`
`
`
`
`
`Plaintiffs,
`
`Defendants.
`
`
`
`
`
`
`
`
`
`
`Index No.: 652492/2013
`
`
`
`AFFIDAVIT
`
`Motion Seq. No. 2
`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`-----------------------------------------------------------------------X
`
`CREDIT SUISSE LOAN FUNDING LLC and
`CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
`
`
`
`
`
`HIGHLAND CRUSADER OFFSHORE PARTNERS, L.P.,
`HIGHLAND CDO OPPORTUNITY MASTER FUND,
`L.P., HIGHLAND CREDIT STRATEGIES MASTER
`FUND, L.P., and HIGHLAND CREDIT OPPORTUNITIES
`CDO, L.P.,
`
`
`
`-----------------------------------------------------------------------X
`State of Texas
`
`)
`
`
`
`
`) ss:
`County of Dallas )
`
`
`JAMES DONDERO, being duly sworn, duly deposes and says:
`
`1.
`
`I am the Co-founder and President of Highland Capital Management, L.P. I
`
`submit this Affidavit in opposition to Plaintiffs’ motion for summary judgment.
`
`2.
`
`Highland Capital Management, L.P. is an SEC-registered investment adviser
`
`which, together with our affiliates, has approximately $18.7 billion of assets under management.
`
`We are one of the largest global alternative credit managers. Our firm specializes in various
`
`credit strategies, such as credit hedge funds, long-only funds and separate accounts, distressed
`
`and special situations private equity, and collateralized loan obligations (CLOs). Highland also
`
`offers alternative investments, including emerging markets, long/short equities, and natural
`
`
`
`resources.
`
`3.
`
`From 2004 to 2008, Highland and its funds participated in syndicated loans
`
`arranged by Credit Suisse that were collateralized by high-end residential and resort
`
`communities, many of which were so-called “dividend recapitalization loans.” The loans at
`
`issue in this lawsuit concerning the Westgate and Goldfield deals are just two of these
`
`transactions. Other similar Credit-Suisse arranged loans, which include loans Credit Suisse
`
`arranged for the developers of Ginn, Lake Las Vegas, Park Highlands, Rhodes, Turtle Bay, and
`
`Yellowstone, are now the subject of lawsuits by various Highland-related funds against Credit
`
`Suisse.
`
`4.
`
`In July 2008, certain Highland-managed funds entered into trades with Credit
`
`Suisse to purchase approximately $58 million of loan interests in the Westgate and Goldfield
`
`deals. Following the Westgate and Goldfield trades, a number of Credit Suisse-arranged loans,
`
`including a number of dividend recapitalization loans, began to default. For example, on July
`
`17, 2008, the Lake Las Vegas borrowers filed for Chapter 11 bankruptcy. In late 2008, the
`
`Westgate borrowers also defaulted. By early 2010, the majority of borrowers on Credit Suisse-
`
`arranged dividend recapitalization loans had defaulted and/or filed for bankruptcy protection.
`
`5.
`
`Sometime after the underlying borrowers began to default and file for bankruptcy,
`
`I met with Timothy O’Hara, a senior Credit Suisse executive and investment banker who was
`
`based in New York, concerning the dividend recapitalization loans Credit Suisse had arranged,
`
`including the unsettled Westgate and Goldfield trades. In response to my concerns, O’Hara told
`
`me that Credit Suisse “would make things right” and said he would get back to me. Based on
`
`these and subsequent discussions, I understood that Credit Suisse had agreed to suspend the
`
`settlement of these trades pending the resolution of my concerns with respect to Highland’s
`
`
`
`2
`
`
`
`participation in Credit-Suisse arranged loans. In reliance on my conversations with O’Hara, I
`
`indicated to Highland’s settlement teams that the Westgate and Goldfield deals would not settle..
`
`6.
`
`Highland has a fund accounting team that is responsible for prioritizing the cash
`
`needs and uses for various Highland funds. Highland’s fund accounting team took into account
`
`the suspension of the settlement of the Westgate and Goldfield trades in connection with the cash
`
`needs of the Highland funds that are defendants in this action. In reliance on the suspended
`
`settlement, the fund accounting team utilized cash, which otherwise would have paid for the
`
`unsettled trades, to satisfy other cash needs of the funds.
`
`7.
`
`By filing this lawsuit against Highland concerning the settlement of the Westgate
`
`and Goldfield deals, and by asking Highland to pay prejudgment interest dating back to 2008,
`
`Credit Suisse seeks to impose substantial prejudice upon Highland.
`
`
`
`
`
`
`
`**********Remainder of page intentionally left blank**********
`
`
`
`3
`
`
`
`State of Texas
`
`)
`
`) ss:
`
`County of Dallas )
`J I 1~ day of June 2014, before me personally came James Dondero, to me
`On this
`known and known to me to be the person described in and who executed the foregoing
`instrument and he acknowledged to me that he executed the same.
`
`jau. &d£A
`
`Notary Public
`
`4
`
`
`
`Certificate of Conformigf
`
`ss:
`
`) )
`
`)
`
`STATE OF TEXAS
`
`COUNTY OF TRAVIS
`
`The undersigned does hereby celtify that she is an attorney at law duly admitted to practice in the
`State of Texas and is a resident of Austin, Texas, and that she is a person qualified to make this
`certificate of conformity pursuant to Section 299-a of the Real Property Law of the State of New
`York. The foregoing acknowledgement by James Dondero named in the foregoing instrument
`taken before jzgm 2175' law , a notary of the State of Texas was taken in the manner
`prescribed by such laws of the State of Texas, being the State in which it was taken; and that it
`duly conforms with such laws and is in all respects valid and effective in such state.
`
`%,
`
`Attorney at law in the State of Texas
`
`ss:
`
`) )
`
`State of Texas
`
`County of Travis )
`22 day of June 2014, before me personally came Lisa Tsai, to me known
`On this
`and known to me to be the person described in and who executed the foregoing instrument, and
`she acknowledged to me that she executed the same.
`
`
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
