It is hard not to admire the Trumpster spirit. While only a few days ago he proclaimed he had ‘a lot of cash’ and wouldn’t have difficulties financing his new golf development in Scotland, he was filing a lawsuit against the lenders of his Chicago project.
Trump declared he wants more time to repay the £430,438,400 loan on the 92-storey Trump International Hotel and Tower, according to the Wall Street Journal.
Due to the ‘unprecedented financial crisis,’ the man whose hair has a life of its own wants to trigger a contract clause normally reserved for ‘acts of war and natural disasters,’ the article says.
Sales in the partly finished tower, which will be the second tallest in America, ‘have come in below original estimates and the project’s current projected revenue remains short by nearly £67.256 million,’ the WSJ reports.
If the Trumpster is in trouble, where does that leave everyone else? The theory that the more you are in debt, the more you can subsequently borrow appears to be in as much jeopardy as Trump’s gleaming glass-and-steel tower.
Playing the ‘act of war’ card might smack of desperation, but perhaps the Redrows, George Wimpeys and Barratts of Britain could consider taking a similar tack.
The credit crisis has so savagely attacked the property industry, are we are not at war with this unseen and unexpected enemy?
Claiming the current global financial catastrophe is akin to a ‘natural disaster’ takes a bit more ingenuity, but somehow Trump just might be able to pull this one off.
Perhaps anything that disturbs his carefully arranged coiffeur could be termed a ‘natural disaster,’ although how natural the most famous hairdo before Sarah Palin’s ‘up-do’ really is remains a mystery.
Could UK developers make a similar move to save their bacon?
According to a high-flying insurance guru in the City, British house builders are well advised to keep up the payments, as Trump looks unlikely to win this time round.
But what Trump’s mad force majeure plea does – and this is the clever bit – is give him a loan extension by default. While the case meanders through the courts, he doesn’t have to pay a bean. It could take years to resolve, and the bank will extend his loan while the lawyers fight.
And who knows? Maybe Trump will succeed. An ‘act of war’ is not just a declared war, but this clause also can include ‘social unrest, acts of aggression, hostilities and popular uprisings.’ Surely, all of these are not far off, alongside Marxist protests about John Sergeant waltzing prematurely off Strictly Come Dancing?
Acts of God are more intriguing, typically applying to natural disasters such as hurricanes, tornadoes, earthquakes and floods. Queues of disgruntled customers outside the Northern Rock do not provide quite the same ‘disaster porn’ images as upturned caravans and washed-out bridges, but the same derring-do Blighty vigour can overcome most any disaster on our fair isle.
The ‘contract frustrations’ loophole is undoubtedly, one Trump is trying to twist his way through. This relates to ‘sanctions, embargoes or restrictions of trade,’ says my City source.
‘Have all the sanctions been lifted from our enemies of days gone by? Or, perhaps Trump’s ego has finally got the better of him and he’s simply proclaimed himself God.’
I can think of several house builders in this country who believe they are gods in their own right, but this might well be a step too far (or a lightning bolt too mythical) to rescue even the most classically creative property hero.
Playing the Trump card
