Deutsche Bank is demanding that Donald Trump pay up on the $40 million construction loan that the real-estate mogul personally guaranteed. But Trump might just legally trump the bank. And this is yet another example why observing legal wrangling has always been the best of free entertainment in America.
In THE NEW YORK TIMES, Floyd Norris reports, "Rather than have to pay the $40 million, Mr. Trump thinks the bank should pay him $3 billion for undermining the project and damaging his reputation." Trump's legal argument rests on the downturn in the real-estate market which the bankers worsened by "creating the current financial crisis."
Norris explains that Trump is using the "force majeure" clause in the lending agreement. If construction is impeded by acts of god or man, ranging from floods to strikes, the borrower can delay completion. Trump contends he is a victim of circumstances he could not control. He, however, is continuing with the construction.
Legal experts predict that the lender will settle. That settlement will likely be in the borrower's favor.
Sorry Trumpy, the time to cry act of God is before your payment is due. Besides, you can't just blame a single bank for _creating_ financial meltdown, that defense is senseless. The collective of banks are in trouble for a large variety of reasons. Yes some rotten apples in the bunch, but its also people who don't repay their loans on the time scheduled in their contract. People with money need to suck it up right now. Keep paying the mortgage, watching the market and business ventures lose some value for a time, and being thankful for enough food and a roof.
Posted by: loanwars | December 28, 2008 at 01:23 PM