More litigation problems for Donald Trump‘s much delayed Trump International Hotel & Tower in Chicago…
Deutsche Bank is not buying Trump’s plea to get out of paying the $330 million in credit he owes to the lender. Friday they filed suit asking for their $40 million guaranty back—now. Meanwhile, the project still isn’t completed, and units within the building are only about 50 per cent sold. Thank goodness Apprentice winner Bill Rancic got out when he did.
Chicago Tribune: Three weeks ago, Trump filed suit against Deutsche Bank in New York State Supreme Court in Queens, seeking to excuse a repayment of more than $330 million due Nov. 7 and extend the construction loan for an unknown period of time because the world economic crisis was a “once-in-a-lifetime credit tsunami.” Trump also seeks $3 billion in damages. On Wednesday, Deutsche moved to have that case dismissed.
This latest suit, filed by Deutsche in Manhattan, calls for Trump to make good on the personal payment guaranty he signed in February 2005 for the building if he didn’t make the loan payments on time. The suit alleges that Trump did not pay the more than $330 million due Nov. 7, a date that had already been extended, and that on Nov. 10, Deutsche made written demands for the outstanding loan payment and the $40 million guaranty. It also notes that in recent press articles tied to a development in Scotland, Trump was quoted as talking about the company’s “very, very strong cash position.” A hearing on the suit is set for Jan. 9…
Despite the fanfare surrounding the building and Trump’s marketing prowess, sales within the building have languished at the 50-per cent mark for the past two years, hobbled by a rough economy and crippled credit markets. Saturday, Trump said more than 50 per cent, but less than 60 per cent, of the units were sold and there remains $325 million of units under contract but not yet closed.
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