Banking Law
Trump Files $3B Suit Against Lenders for Chicago Condo and Hotel Skyscraper
Posted Nov 10, 2008, 11:02 am CST
By Debra Cassens Weiss
Donald Trump is suing to extend a $640 million construction loan on a condominium and condo hotel project in Chicago that will be the nation’s second-tallest building.
Slowing sales of condos and hotel rooms put projected revenue nearly $100 million below the amount needed to pay off a group of senior lenders led by Deutsche Bank AG, the Wall Street Journal reports. Trump stands to lose $77 million of his own money that he has put into the project if there is a foreclosure, the story says.
The suit seeks $3 billion in damages, according to the Wall Street Journal.
The suit filed in New York state court claims the extension should be granted because of the "unprecedented financial crisis in the credit markets now prevailing, in part due to acts Deutsche Bank itself participated in," according to the story. Trump contends the financial meltdown is an extraordinary event triggering a force majeure clause in the loan agreement permitting extensions, Crain’s Chicago Business reports.
The suit says Trump offered to buy unsold hotel units in the building for $97 million, but the group of lenders was unable to reach a consensus, according to the Wall Street Journal. Trump blames Deutsche Bank, saying it sold pieces of its loan to "so many institutions, banks, junk bond firms, and virtually anybody that seemed to come along" that the large group could not agree on Trump's offer.
Trump is seeking a second extension after the lenders granted an extra six months to pay the loan. The suit says Trump wants to cut prices, but his lenders won’t allow it.
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