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Historical Title: Trump Sees Act of God in Recession Guess who is complaining that condominiums in Donald Trump’s latest big project are ridiculously overpriced. Donald Trump is. But he isn’t cutting the prices. He says the banks won’t let him. The project is the Trump International Hotel and Tower in Chicago, which is to be the second-tallest building in that city (after the Sears Tower). By Mr. Trump’s account, sales were going great until “the real estate market in Chicago suffered a severe downturn” and the bankers made it worse by “creating the current financial crisis.” Those assertions are made in a fascinating lawsuit filed by Mr. Trump, the real estate developer, television personality and best-selling author, in an effort to avoid paying $40 million that he personally guaranteed on a construction loan that Deutsche Bank says is due and payable. Rather than have to pay the $40 million, Mr. Trump thinks the bank should pay him $3 billion for undermining the project and damaging his reputation. He points to a “force majeure” clause in the lending agreement that allows the borrower to delay completion of the building if construction is hampered by such things as riots, floods or strikes. That clause has a catch-all section covering “any other event or circumstance not within the reasonable control of the borrower,” and Mr. Trump figures that lets him out, even though construction is continuing. “Would you consider the biggest depression we have had in this country since 1929 to be such an event? I would,” he said in an interview. “A depression is not within the control of the borrower.” He wants a state judge in the Queens borough of New York to order the bank to delay efforts to collect the loan until “a reasonable time” after the financial crisis ends. Deutsche Bank thinks the idea that an economic downturn should free people from the obligation to pay their debts is laughable. Mr. Trump, it may be noted, does not think remorseful condominium buyers are in a similar position. When I asked him if he would let them walk away from contracts to buy apartments at predepression prices, he said he would not. “They don’t have a force majeure clause,” he said. The suit, and a parallel one by Deutsche Bank seeking the money, provide a glimpse into both how Mr. Trump does business and into the way the real estate loan market was operating in 2005, when the loan was made. For this big project, built on the site of the old Chicago Sun-Times building, it appears from the court papers that Mr. Trump put in little of his own money. He got a construction loan for up to $640 million from a syndicate headed by Deutsche Bank and a $130 million junior loan from another syndicate headed by Fortress Investments, a hedge fund operator that has troubles stemming in part from bad loans made for other real estate projects. The people who negotiated the construction loan did not think real estate prices could tumble. The loan agreement requires partial repayment each time an apartment is sold and provides a detailed list of the minimum prices to be charged. According to Mr. Trump’s suit, he cannot cut prices without the unanimous consent of the lenders, and that has not been forthcoming. There are a lot of lenders in the deal, and some of them appear to be banks and hedge funds that are no longer in good shape. The loan was due Nov. 7, and the lenders did not grant a requested extension. Mr. Trump filed his lawsuit just before that deadline. Mr. Trump sees a dark conspiracy. He says Deutsche Bank, through a subsidiary, owns $30 million of the junior loan, and he says that is a blatant conflict of interest because in some cases the interests of the two loans can differ. To Mr. Trump, the bank’s actions suggest it is trying to seize the building just before its great success is assured. The bank responds that the loan agreement makes clear that it has a right to do everything it has done, and that Mr. Trump should live up to his obligations, paying $40 million of the $334 million outstanding balance on the construction loan. The rest is owed by the Trump-controlled company sponsoring the project but is not personally guaranteed by him. If Mr. Trump was forced to pay the $40 million, he would be unlikely to permanently lose it, since his company would owe it to him. If the project went under, his claim would rank higher than the Fortress loan. Deutsche will make nothing from its investment in the junior loan if Mr. Trump does lose any money. Some sort of settlement seems wise. It is in everyone’s interest that construction be completed, and in fact the bank advanced $13 million to pay contractors’ bills this week. Mr. Trump has not said by how much he thinks the apartments are overpriced, and he did not tell me. But it seems unlikely that sales will be very good until prices are cut. In his suit, Mr. Trump claims that the bank’s “predatory lending practices” are harming his reputation, “which is associated worldwide with on-time, under-budget, first-class construction projects and first-class luxury hotel operations.” The bank seized on the opportunity to discuss Mr. Trump’s reputation. “Trump is no stranger to overdue debt,” it said in asking that his suit be thrown out of court. It noted that Mr. Trump’s casino operations have filed for bankruptcy twice, adding, “This suit is classic Trump.” The bank did not discuss why that history did not dissuade it from making the loan. One explanation might be that the fees it got for arranging the loan more than offset the risk from the small part of the loan it kept on its own books. Mr. Trump is vigilant in protecting his reputation. After I interviewed him and two associates, his general counsel sent me a note saying “it was a pleasure” talking to me, and adding: “Please be assured that if your article is not factually correct, we will have no choice but to sue you and The New York Times.” The Friday after Thanksgiving was not a really good one for Mr. Trump. Trump Entertainment Resorts, the casino company, announced it would miss an interest payment on its bonds, raising the likelihood of a third bankruptcy. Most of the shares are publicly owned, having been distributed to creditors in the last bankruptcy. They have fallen from a peak of $23.80 two years ago to 24 cents on Thursday. Mr. Trump is doing his best to sound like that is not important to him. The casino company’s announcement emphasized that Mr. Trump was the “nonexecutive chairman” who was “not involved in the daily operations” of the company. He told me that “less than 1 percent of my net worth” is in the casino company. At the current price, no shareholder could have a large net worth in that stock. On the same day, in New York, Deutsche Bank asked a judge to issue a summary judgment requiring Mr. Trump to pay the $40 million. In that filing, the bank quoted from a best-selling book Mr. Trump wrote last year, “Think Big and Kick Ass in Business and Life.” In it, the developer said he loved “to crush the other side and take the benefits” and mocked the banks that had lost money on loans made to him before another real estate downturn, in the 1990s: “I figured it was the bank’s problem, not mine. What the hell did I care? I actually told one bank, ‘I told you you shouldn’t have loaned me that money. I told you the goddamn deal was no good.’ ” If Mr. Trump manages to persuade a judge that the current crisis provides him with a good reason not to meet his obligations, he will have some great tales to tell in his next book.
Poster Comment: Old news, but a good view into how Trump operates. "One set of rules for me, another set for you".
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#1. To: Skip Intro (#0)
Sounds good to me if he will negotiate that way with the Chinese and other foreign nations. Maybe he can sell that Obama wasn't really president and therefore everything he did is null and void. That would be a good accomplishment.
Do you ever stop and think before you post?
Obama can't provide a birth certificate. He is an illegal president. Once a court agrees everything he has done is void. He would have to offer some proof. He hasn't been able to so far.
He did provide a birth certificate. Everything else in your post is bullshit.
A certificate of life birth isn't a birth certificate. For example. Who was the delivering doctor? Which hospital was it at? His Grandma. Who was there. (you weren't there were you)? Said that he was born in Kenya.
No, Stone, she didn't.
No, Stone, she didn't. You can stick your head in the sand if you want to. But that is what she said. His wife said he was from Kenya too. You probably deny that too.
I feel sorry for you Stone. It must be tough going through life as an idiot.
You can call me an idiot. But you can't back up your position. Except to say it isn't so.
Yes, I can back my position up. It's been backed up hundreds of times by hundreds of people for years now. But there's no point with people like you. I'm just looking forward to the day Trump comes out with his groundbreaking announcement that yes, Obama was born in Hawaii, so there's no need for him to run. And thanks for the ratings boost to my tv shows.
Or if Trump isn't running. He can say he might run. Then he can pound and pound on that issue. Convincing many Americans that it is true. Then he takes the heat for it (if there is any). It gets into the American consciousness. That means more people motivated to kick Obama out of office. It is a win win situation. Or lose lose for the commies you support.
IMO Trump is throwing stones at hObama in lieu of the mainstream GOP candidates, who are too cowardly to do it themselves. It's a show for the rubes whom they hope to con into voting for the GOP libtard of choice. Just say NO to the anti-American globalists, of both parties!
Palin and Bachmann have been doing it longer, but you, being an ignorant msogynist, won't admit it, will you hondope?
ignorant msogynist hondope They're too cowardly to address hObama's eligibility issues. They're globalist neocon, liberal pussies, like you.
While yukon was visiting his Alaskan bath houses; we were in Vietnam; the punk has never served in the military knowing he would be kicked out for his sexual voyeur exploits. According to Goldi-Lox, "they" are born that way and it is no fault of their own.
Making a fool of yourself is easy for you, clyven. You are a liar, thief, coward, fraud, impersonator and deserter, besides being an old perverted alcoholic. Your woody for Goldi is legendary and so childishly pathetic. You are a psychopath.
The list of accomplishments which earned you the "conservative" canary award?
Only a dope would call lying, stealing, cheating, impersonating and fraud, accomplishments.
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