Wikinvest Wire

Trump to lenders: You're fired! sued!

Tuesday, November 11, 2008

As goes "The Donald", so goes the country ... apparently.

The papers have been full of stories in recent days about New York real estate developer Donald Trump who may soon put to the test his theory that he is included in the group of borrowers who are "too big to fail".

So far, not so good.

Over the weekend, this WSJ story recounted the trouble brewing in Chicago and the lawsuit that has followed, seeing fit to include one of the creepiest sketches in recent memory (admittedly, the hair must be a challenge for any artist).

Trump Files Suit Against Lenders
Donald Trump filed suit against the lenders on his unfinished Chicago skyscraper, plunging the project into legal turmoil and highlighting the credit crunch's pervasive effects on real estate.

Mr. Trump is suing to extend a $640 million senior construction loan on the 92-story Trump International Hotel & Tower from a group of lenders led by Deutsche Bank AG and including a unit of Merrill Lynch & Co., Union Labor Life Insurance Co., iStar Financial Inc., a publicly traded real-estate investment trust, and Highland Funds, a unit of Highland Capital Management LP.

The tower, which contains 339 hotel rooms and 486 condominiums, will be the second-tallest building in the U.S. behind Chicago's Sears Tower and is expected to be completed in mid-2009. The hotel, on the lower floors, opened earlier this year. But sales of both the hotel rooms and the condominiums have come in below original estimates and the project's current projected revenue remains short by nearly $100 million needed to pay off the senior lenders.

The lawsuit, filed in New York State supreme court in Queens, is a further indication of the dysfunction in the real-estate lending markets as borrowers and lenders struggle to resolve troubled projects. People familiar with the matter say the lender group, which is made up of more than a dozen institutions, was unable to agree on the extension.
The host of NBC's erstwhile hit show The Apprentice - as good a fading symbol as any of the real estate glory days of just a few years ago - has put some $77 million of his own money into the Chicago project.

That could prove to have been a big mistake.

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2 comments:

I'm Not POTUS said...

I wonder if he will send the insurance bill for the tower to the Banks. He did that last time he went BK with his yacht.

Last time the banks paid it fearing an "accident" but how will he "sink" a 96 story tower?????

I guess he already did.

ShortWoman said...

Oh come on. Trump will threaten a lawsuit if you look at his hair wrong.

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