He's Mired!

In debt trouble; Trump sues for relief

By David Hogarty
|  Tuesday, Nov 11, 2008  |  Updated 5:28 AM PDT
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He's Mired!

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Donald Trump needs a break on his rent from creditors.

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Donald Trump is suing investors to get a break on payments he owes for building the United States' second-tallest building.

Trump's decision to build the tallest building in the United States since Chicago's Sears Tower probably could not have been more ill-timed. The 92-story Trump International Hotel & Tower was undertaken when real estate prices were soaring and credit was easy. As it was being topped off, however, credit markets dried up and the real estate market began a precipitous collapse.

With payment dates looming, Trump has an inventory of unsold units in the apartment building, which look to be worth less and less as the real estate market weakens, A declining value of the Euro versus the dollar--a recent prop in the market for luxe residential properties--is not helping matters.

The real estate celebrity filed suit in Queens, New York, citing the unprecedented financial crisis as reason for a loan extension. Trump is short approximately $100 million on a loan from senior creditors that include several banks mired in the current credit crisis (e.g. Merrill Lynch). The "force majeure" clause Trump is citing is generally related to acts of war or natural disasters.

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