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Trump v. Lenders: What suits say about how he’d govern

Part IV of TRD's dive into the GOP front-runner's legal history

Donald Trump
Donald Trump

From the April issue: Donald Trump is on the verge of claiming the Republican nomination for President of the United States.

In this month’s issue, The Real Deal took a deep dive into Trump’s litigation history, focusing mostly on Manhattan real estate. We reviewed hundreds of cases filed in Manhattan courts between the early 1980s and last month that involved Trump or one of his business entities. The suits also offer a window into his temperament — beyond the campaign bluster — and into how he would conduct himself as the leader of the free world.

Below is the fourth — and final — web installment of a story that looks at decades of Trump’s legal battles and how he handled each one.

Good deal, bad deal

“I actually told one bank, ‘I told you, you shouldn’t have loaned me that money. I told you that goddamn deal was no good,’” Trump wrote in his 1997 book “Think Big: Make it Happen in Business and Life.”

But even when his deals have gone belly up, he hasn’t made a habit out of suing banks.

In New York, Donald Trump’s bankruptcy history is limited to The Plaza, where in 1993 he surrendered a 49 percent stake and control of the hotel’s operations to Citibank and five other lenders, as part of a bankruptcy plan approved in court.

“He never sued banks,” one attorney told TRD. “He was too smart to do that.”

In TRD’s litigation review, we only found one case of Trump ever suing one of his lenders, a dangerous move that can harm a developer’s reputation and ability to get future loans.

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In 2008, Trump sued a group of creditors led by Deutsche Bank for a staggering $3 billion, claiming the lenders broke agreements related to the financing of Trump International Hotel and Tower in Chicago. Trump claimed that the financial crisis was a force majeure that led to poor sales, leaving him unable to pay an outstanding $334 million. Deutsche also sued Trump, looking to collect a $40 million personal guarantee Trump was obligated to pay in the case of a default.

In 2009, the parties agreed to settle, citing fears that the suit could further hurt sales at the tower.

In New York, Trump has two loans in which the underlying assets are Manhattan properties. And both were issued or refinanced since Trump’s suit against Deutsche. They are with Ladder Capital — one for $100 million at Trump Tower and the other for $160 million at 40 Wall Street.

Heritage Strategies’ Jim Fitzgerald — who worked with Yasuda Bank when it had an interest in several Trump loans in the early 1990s — said lenders are “notorious for having short memories.”

Plus, he said: “There’s tons of guys who are more difficult than Trump who rose from the dead and borrowed money again.”

Rising from the dead may be more difficult when it comes to his presidential aspirations.

While Trump is moving closer to locking in the Republican nomination with each passing primary win, there is still heated talk of a contested GOP convention.

Just last month, news broke that Marco Rubio, who dropped out of the race, is now attempting to keep his delegates. And after Trump got wind of Cruz’s plan to woo unbound delegates in Louisiana following Trump’s primary win there, the frontrunner fired off an angry Tweet that ended with this: “Lawsuit coming.” Yet his campaign quickly backtracked, vowing to file a complaint with the Republican Party instead. Lawsuit shelved — at least for now.

Kyna Doles contributed research to this story.

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