Deutsche Bank AG (NYSE: DB) has sued Donald Trump, demanding that he pay a $40 million personal guarantee that was part of a $640 million construction loan that Deutsche Bank originated in 2005. The loan came due on November 7th with an outstanding balance of $334 million.The loan is related to the development of the The Trump International Hotel & Tower in Chicago. The building is expected to be finished in early 2009, and the lower floors are already open for business. According (subscription required) to The Wall Street Journal, the building will be the second largest in the United States. Last month, Trump sued Deutsche Bank for an extension on the loan, claiming that the financial meltdown had triggered the force majeure clause of the contract that normally applies to wars, riots and acts of God.
A New York State Court rejected Trump's argument, but apparently he still hasn't coughed up the money. Now he's being sued for it.
It appears that Trump is back in trouble with lenders. Last week, Trump International Resorts (NASDAQ: TRMP) disclosed that it had missed an interest payment.
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Reader Comments (Page 1 of 1)
12-01-2008 @ 10:30AM
BHarrison said...
Well, it couldn't happen to a more deserving person. This guy has gotten wealthy using OPM - Other People's Money all of his life. As noted by another columnist, Trupm is infamous for "looting" the corporations for his exorbitant unwarranted salaries and compensations at the unwarranted costs to the other stock holders.
It would be satisfying to see him have to pay up for once.
12-01-2008 @ 5:12PM
sean said...
I doubt Trump has 20 million in liquidity period. The man lives from hand to mouth(reletively better then most) and always has. He is over extended and always has been. Constantly on the edge due to his over extending ambitions. Financially juggling to many projects. That is why he hawks bottled waters and stars in tv shows. What billion needs that? One who has no liquidity and likes to lvie lavishly, that is who. He needs the money to lie the lifestyle he has become accustommed to. That might work in boom times , but eventually catches up with him in down times. Now he pays the pipper. He never learns from his mistakes and deadly combination. With the adjustments from the declining market and what he owes on his properties, he may not even be a billioniare.
12-01-2008 @ 6:16PM
Lisa said...
HOW DOES SOMEONE GET AWAY WITH THIS ON A CONSISTANT BASIS, I AM IN AWE. IF ANY NORMAL PERSON TRYED THIS, WE WOULD BE SUNK, AND FOR LIFE, NO ONE WOULD EVER LOAN US A PENNY, BUT BANKS KEEP LOANING HIM MONEY....WHY???????? HE ALWAYS HAS THE GUTS TO SAY, HE PERSONALLY HAS NEVER HAD FINANCIAL PROBLEMS, JUST HIS HOLDINGS, BUT IF HE IS THE HEAD OF HIS HOLDINGS ISN'T THAT THE SAME THING???????