The real estate market is as bad as it gets, so lenders are getting cold feet about big projects. Even Donald Trump, who can usually work magic filling his buildings with tenants, is running into problems. (It should be noted he has never been good at the casino business and spends too much time doing TV junk like The Apprentice).
Trump may not have much of an argument. He wants an extension to the loan for his residential tower in Chicago, which means a portion of its has lapsed. Why the banks involved, including Germany's largest bank, Deutsche Bank (NYSE: DB), would do that is unclear.
According to The Wall Street Journal, "The suit demands -- among other things -- that an extension provision in the original loan agreement be triggered because of the unprecedented financial crisis in the credit markets now prevailing, in part due to acts Deutsche Bank itself participated in." In other words, the financial crisis almost rises to the level of being an "act of God." Not quite, but getting close.
Trump's real problem is not the banks. Since everyone in the U.S. is poor, no one wants to buy his expensive Chicago condominiums. A lawsuit won't solve that.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
11-08-2008 @ 2:44PM
huge said...
no bad for the big baby .... i am tearing up for poor old donald trump
11-08-2008 @ 3:20PM
BBBAAAHHH!!! said...
Bad timing , with the credit thing all screwed due to the wall street pirates stealing all the money there is not enough to go around , the people that have it , the banks are hanging on to it
11-08-2008 @ 8:17PM
Tom said...
Donald can try to swap his property to get some sales in.
email Tomgloble@aol.com
Thomas Simjian
http://www.myspace.com/thomasproperties
11-08-2008 @ 9:18PM
Mac said...
Smart move on his part. Until the suit is resolved the bank cannot call the note.
11-08-2008 @ 10:30PM
JoJo said...
"The suit demands -- among other things -- that an extension provision in the original loan agreement be triggered because of the unprecedented financial crisis in the credit markets now prevailing, in part due to acts Deutsche Bank itself participated in." In other words, the financial crisis almost rises to the level of being an "act of God." Not quite, but getting close.
****
"An act of God"? What kind of drugs are you doing? That's not what the argument is. The Deutsche Bank isn't honoring a clause in their contract because of the financial crisis, and Trump is pointing out that Deutshe Bank was participating in the market and lost, but should still honor their contract.
11-09-2008 @ 12:33AM
Kent said...
Trump Enterprises is now feeling the effects from the credit squeeze as our economy implodes around us. If Deutch Bank and others accede to Donald's demands for the loan extension, it would only be because of maintaining his goodwill when the economy recovers. If they refuse, they'll lose future business with him forever. Apparently he is facing similar problems with his casino project in Vegas, but fortunately they only broke ground at this point. I wonder if he can follow through with his Scotland project as well? It's really a bad time for going into realestate.
11-09-2008 @ 2:41AM
Rollando said...
I do not like banks any more than Trump does. However, people in his position of wealth could care less for the small guy. I really hope the banks stand tough with him as they do with everybody else. If they give in to him on this sue, then perhaps everybody and his or her cousins should also sue the banks for their financial dilemma similarly as Trump has.
11-09-2008 @ 8:38AM
Neolight said...
"Since everyone in the U.S. is poor, no one wants to buy his expensive Chicago condominiums."
Great article that got cut off at the knees by this strange sentence, in my opinion...
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