LOS ANGELES (CN) - A group of Californians who bought planned condos at the troubled Cosmopolitan high-rise project on the Las Vegas Strip say Deutsche Bank "perverted the class-action system" and "railroaded" buyers into an unfair settlement that netted $64 million worth of deposits, all while "playing coy" as to whether the project will even include condos at all. "Defendants have walked away laughing, having duped both the majority of buyers and the court," plaintiffs claim in Los Angeles Superior Court.
About 39 condo purchasers in "one of the largest condominium/hotel developments in Las Vegas history" say they were recruited "with aggressive sale tactics" and told the project would be finished by 2008.
But the original developer, 3700 Associates, defaulted on its construction loan in 2007, and Deutsche Bank foreclosed on the project, according to the complaint.
"Construction ground to a virtual halt," the lawsuit states, and Deutsche Bank announced that the complex would not be done in 2008, but "would perhaps be completed sometime in 2010."
According to the complaint, "What Deutsche Bank did not reveal was that they were considering - and would later decide - to abandon the condominium component of the Cosmopolitan entirely and develop it exclusively as a hotel."
Plaintiffs say they have tried to get their deposits, interest and attorneys' fees back, citing the language of the contract that calls for the refund of those monies "if their condominium units would not be completed as planned."
But defendants have "flatly refused to return a cent, despite facing multiple arbitrations and a class action lawsuit," according to the complaint.
Deutsche Bank then "conceived a fraudulent plot to keep tens of millions of plaintiffs' deposits, even though they did not intend to deliver their condominiums," the lawsuit states.
Plaintiffs say the plan was simple: "Defendants brazenly concealed their abandonment of the condominium project from both the court and plaintiffs," while stating the project would be completed as planned and holding plaintiffs to their contracts.
Based on defendants' "malicious concealment, the majority of buyers were railroaded into an unfair class action settlement, accepting a mere 60.9 percent net, after attorneys' fees, of their deposits and forfeiting the remaining 39.1 percent to Deutshe Bank," according to the complaint.
Plaintiffs say they refused to accept the 60.9 percent of their deposits, "when they knew that they were entitled not only to the entire amount plus interest, but also to their attorneys' fees."
They say defendants have refused to negotiate, or even confirm whether the Cosmopolitan will include condos when completed.
"If Deutsche Bank has always intended to complete plaintiffs' condominium units, why would its counsel coyly refuse to confirm this fact?" the complaint asks.
Plaintiffs seek at least $64 million for fraud and conversion, along with attorneys' fees. They also want the class action settlement rescinded.
They are represented by Daniel Park with Lurie & Park.
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