Slicing & Dicing Left Building Loan Compromised, Says Trump In Suit Seeking $3B Damages From Lenders After Refusal To Extend Debt On Chicago 'Scraper

The Wall Street Journal reports:

• 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. [...] Mr. Trump asked for $3 billion in damages.(1)

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• Deutsche Bank originated the construction loan in 2005 and sold off most of it to others, retaining less than $10 million of exposure on that loan. The suit alleges [among other things] that Deutsche Bank compromised the senior construction loan by selling pieces off to "so many institutions, banks, junk bond firms, and virtually anybody that seemed to come along," that the lending group is unable to come to a consensus on how to deal with the matter.(2)

For more, see Trump Files Suit Against Lenders (Developer Seeks to Extend $640 Million Loan on a Chicago Skyscraper).

In a related Wall Street Journal story, see In Chicago, Trump Hits Headwinds.

In a related story in The New York Times, see Trump Sees Act of God in Recession.

Editor's Note:

If anyone has a digitized copy of this lawsuit, please don't hesitate to e-mail me a copy of it, if it's not too much trouble. The lawsuit's index number is 026841/2008, filed in NYS Supreme Court - Queens County last Thursday (November 8).

(1) Possibly seeking a "home court" advantage in the litigation, Trump filed the lawsuit, not in Chicago where the skyscraper is being built, but in New York State supreme court in Queens County, NYC.

(2) This appears to have left Trump similarly situated with the thousands of average homeowners facing foreclosure who, arguably, have had their home loans equally compromised by similar "slicing and dicing" that has left bits and pieces of their loans in the hands of a myriad of investors scattered around all over the place.