Another day, another Donald Trump lawsuit.
Bloomberg reports that "Trump and Los Angeles-based Irongate Development allegedly induced buyers with marketing materials touting Trump's involvement when he had merely licensed his name to the project, known as Trump Ocean Resort Baja, according to the complaint filed yesterday on behalf of 69 condo buyers in state court in Los Angeles."
The buyers were recently informed that the project would not be completed due to financing issues. People who put down hundreds of thousands of dollars in deposits won't see their money back.
Trump will probably avoid legal liability because it was essentially a licensing deal where he lent his name to the project in exchange for a cut of the sales. However, there could be one possibility: Trump and his daughter Ivanka made appearances in support of the sales efforts and if they misled prospective buyers about their roles in the project, that could lead to trouble.
To me, though, it's shocking that people actually bought condominiums based on the credibility imputed by the Trump brand. To me, Donald Trump stands for self-promotion and tackiness, not prudence and stability.
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Reader Comments (Page 1 of 1)
3-16-2009 @ 4:27PM
BHarrison said...
Yeah, the licensing deals were common. Anyone naive enough to buy something just because Trump's "name" was on it must REALLY BE NAIVE AND STUPID.
Now Trump's "reputation" should precede him in any deals inthe future. Maybe that will devalued the projects that his name is on.
3-16-2009 @ 4:30PM
Kent said...
Donald Trump has similar problems with Trump Towers in Las Vegas which only sold 1/3 of the units while the remaining contracts could not be closed due to the credit crunch. Fortunately, the Tower was completed with Donald's direct involvement. Innovatively, they are considering converting the remaining Tower units into rental units, fetching anywhere from $1600 to $6,500/month. Perhaps the banks might reconsider financing the Bajo Resort under this same plan.