Deutsche Bank Trust Co. Americas ratcheted up its battle with Donald Trump, claiming the hard-charging developer personally owes it $40 million after defaulting on a $640 million construction loan for Trump International Hotel & Tower in Chicago.
On Friday, Deutsche, the main lender on Trump’s development alongside the Chicago River, filed suit against Trump in New York State Supreme Court in Manhattan.
It is the second suit filed within a month over the high-profile project under way at 401 N. Wabash Ave., which at 92 stories has already become a dominant figure on Chicago’s skyline.
On Saturday, Trump said that despite the suits, the building’s construction will be completed within five months. Meanwhile, his attorneys said an agreement that provides continued construction financing for the project has been under negotiation for weeks and could be completed this week.
Steven Molo, an attorney representing Deutsche, declined to comment on the latest suit or the financial discussions between Deutsche and Trump. Without continued funding, Deutsche could eventually find itself in the unenviable role of developer.
Last month, Trump filed suit against Deutsche Bank in New York State Supreme Court in Queens, seeking to excuse a repayment of more than $330 million due Nov. 7 and extend the construction loan for an unknown period of time because the global economic crisis was a “once-in-a-lifetime credit tsunami.” Trump also seeks $3 billion in damages. On Wednesday, Deutsche moved to have that case dismissed.
This latest suit, filed by Deutsche, calls for Trump to make good on the personal payment guarantee he signed in February 2005 for the building if he didn’t make the loan payments on time. The suit alleges that Trump did not pay the more than $330 million due Nov. 7, a date that already had been extended, and that on Nov. 10, Deutsche made written demands for the outstanding loan payment and the $40 million guarantee.
The suit was first reported by Crain’s Chicago Business.
Despite the fanfare and Trump’s marketing prowess, sales within the building have languished at the 50-percent mark for the last two years, hobbled by a rough economy. On Saturday, Trump said more than 50 percent, but less than 60 percent, of the units had been sold and there remains $325 million of units under contract.
“The construction is continuing onward,” Trump said.
Trump attorney Steven Schlesinger said he has not yet seen the suit.
By Mary Ellen Podmolik |Tribune reporter
December 1, 2008
Source: Chicago Tribune