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Main Discussion

Deutsche Bank & Donald Trump
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Cordelia Chase
Posted - 16 February 2017 14:29
If this was the plot of a film it would be rejected for being unrealistic.

It was November 2008. Three-and-a-half years earlier the bank had loaned Trump the cash to build one of his grandest projects yet: a hotel and mega-tower in Chicago.

Trump had given his personal guarantee he would repay the $640m. As per agreement, he was now due to hand over a large chunk, $40m.

There was only one problem: the future 45th president of the United States was refusing to pay up. Deutsche initiated legal action. Trump responded with a blistering, scarcely credible writ of his own, a 10-count complaint in New York’s supreme court, in the county of Queens.

In it, Trump adopted a highly unusual defence, known as “force majeure”. He claimed that the 2008 economic crisis was a “once-in-a-century credit tsunami”, an act of God that was equivalent to an earthquake.

Since it couldn’t have been anticipated, and it wasn’t his fault, he wasn’t obliged to pay Deutsche anything. It wouldn’t get the $40m or the outstanding $330m, his writ said.

He went further. Trump claimed Deutsche Bank had actually helped cause the crunch. Therefore it owed him. Trump demanded $3bn from Deutsche in compensation.


https://www.theguardian.com/business/2017/feb/16/how-donald-trump-became-deutsche -bank-biggest-headache
300 Sleeps To Christmas
Posted - 16 February 2017 14:34
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Old rule, you owe the bank £1,000 and it owns you. You owe it $640m and you own it.
blindtom
Posted - 16 February 2017 14:44
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I'd heard this one before and so far as I recall they weren't pursuing Trump for the whole debt, only his personal guaranteed sum which was the $40m. I'm trying to imagine what some Germans would have thought when they received the ludicrous counter claim of $3bn. This is kind of indicative of how he has operated in the past and it has always amazed me that banks were willing to loan him anything when behaviour like this was hardly secret.
Parsnip
Posted - 16 February 2017 14:46
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art of the deal

throw something massive at them and then take it back and it looks like you are negotiating

you owe me $3bn - i owe you $40m, ok so maybe we call it quits

Barnsbury
Posted - 16 February 2017 14:50
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That sort of negotiating tactic can work really well if you're dealing with a moron. In any other situation it makes you look like a time-waster.

I mean really. He told his lawyers to find him a really big counterclaim and that was the best they could come up with? Did they think if they underlined the really important bits in green ink that would improve their chances of success?
Parsnip
Posted - 16 February 2017 14:53
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who knows what the position is under US law? i dont
In the UK, I am pretty sure the MAC arguments didnt run / win
Barnsbury
Posted - 16 February 2017 14:55
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There's that case about oil tankers during the Suez crises. The tanker had to go all the way round Africa because the canal was shut. It was late but said "force majeure - completely unforeseeable that a war would start". Court said "no". Improbable yes, unforeseeable (or whatever) no.
Keith Nearing
Posted - 16 February 2017 14:59
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Aren't all property financing arrangements secured on the land/building itself?

Surely Deutsche just take the keys and flog it?

If they actually lent the orange shitgibbon unsecured money, with his reputation and history of tactical defaulting, then they're utter muppets.
blindtom
Posted - 16 February 2017 15:05
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He has a track record of leaving investors, partners and lenders in the lurch. More than that what bothers me is that he appears to take glee in doing so.
Keith Nearing
Posted - 16 February 2017 15:08
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Agree.Combined with his zeal for repealing Dodd-Frank...
Parsnip
Posted - 16 February 2017 15:10
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presumably if you argue force majeure makes the loan somehow void then you have to give the money back. you can't say, our deal was void but i get to keep the money
Osama
Posted - 16 February 2017 15:10
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most "tycoons" behave like this