Financial issues and lawsuits
In October 2007, Trump expressed confidence in the Trump International project despite putting a second, nearby condo-hotel project on hold due to poor real estate conditions.[13] Trump International was ultimately planned to open in 2009. The project had deposits on 70 percent of its units, but following the poor real estate market, many buyers eventually lost interest in the project or were among those who would eventually file lawsuits against it. Bayrock Group ultimately sold its interest in the project to an Icelandic firm.[14]
In May 2009, investors were informed that they had to complete their unit purchases that month. The developer, known then as SB Hotel Associates LLC, stated that the project would likely remain unfinished if less than half of the units were purchased. Buyers were also informed that because of local zoning rules for condo-hotels, they could not occupy their units unless the entire hotel opened. By that time, various lawsuits had been filed by 30 buyers who wanted refunds on their 20-percent deposits.
The lawsuits alleged misleading advertising, with buyers stating that they were misled into believing that Trump's involvement in the project was fully confirmed. However, sales contracts, which referred to the project as the SB Fort Lauderdale Hotel & Condominium, stated that Trump had the right to end the licensing deal and remove his name from the project. Additionally, it was alleged that the marketing materials suggested Trump was a developer in the project, including a letter to investors in which Trump referred to the project as his "latest development." Other marketing material referred to the project as a "signature Trump development." The lawsuits also alleged breach of contract for the failure to have the project completed by December 2008.[15] By the time of the lawsuits, Trump had told the developers that they could not use his name for the project after they defaulted on the licensing agreement.[16]
Corus Bankshares was struggling as of August 2009. By that time, the building had been furnished but remained unoccupied by tenants, and the project had been financed through $182 million in construction loans.[17] The project eventually defaulted on the $139 million loan before its planned 2009 opening.[18] Corus Construction Venture, led by Starwood Capital Group and later known as ST Residential,[19] ultimately took over the mortgage to the property, and in March 2010 filed for foreclosure against SB Associated LLC for defaulting on the loan. The suit named over 80 buyers who never received their units or a refund on their deposits. The foreclosure was expected to take at least six months before being resolved due to the large number of people involved and because of backed-up foreclosure lawsuits in the courts.[20][21]
In November 2010, Trump announced that the name licensing agreement had been terminated "a long time ago" and that he was not involved in the foreclosure process, which was expected to take an additional six months because of the large number of involved parties – more than 100 buyers – and the backlogged county courts.[22] Ultimately, 75 buyers had filed lawsuits against the project,[23] after they spent a combined total of $8 million on deposits for units.[24] Some investors were upset to learn in 2012 that Felix Sater, a Bayrock Group employee, was involved in the project despite his financial crimes related to the Mafia. Lawyer Joe Altschul had represented the 75 buyers, and stated that they would not have invested in the project if they had known of Sater's involvement.[23]
A foreclosure auction was scheduled for March 14, 2012, as requested by Corus Construction Venture, which was owed $165.6 million from SB Hotel Associates.[25] Corus Construction Venture purchased the project in the foreclosure auction, after no other bidders attempted a purchase due to the high $165.6 starting price, as well as the number of lawsuits associated with the project.[26] In March 2013, ST Residential offered the entire project for sale in a bulk offer, rather than selling the units individually. It was stated that the project had been "well maintained and is in nearly move-in ready condition." A price was not specified,[27] although experts for ST Residential had expected the project to sell for at least $125 million.[19] By that time, nearly $4 million in liens had been filed against the project by previous buyers.[27]
A lawsuit filed by two buyers was the first to go to trial, in March 2014. The buyers stated that they invested in the project because they believed Trump was the developer, a claim that was refuted by Trump during his testimony.[28] The two buyers sought $250,000 in unreturned deposits.[29] The jury ruled in favor of Trump, whose attorney said he would seek millions of dollars in attorney fees from the buyers.[30][29] Trump still faced a similar lawsuit consisting of 81 plaintiffs who were suing for the return of the $8 million deposit fees.[18] Attorneys in the initial trial alleged that the judge displayed favoritism toward Trump which altered the jury's decision, but their request for a new trial was denied. Other lawsuits were expected to go to trial later that year,[31] and many of them were settled confidentially.[24]
In June 2015, Trump sued Stillman for breach of contract, alleging that he lost millions of dollars because of the project's failure and because of legal fees. Trump stated that he had previously warned Stillman not to settle lawsuits related to the project unless Trump were released from liability, and alleged that Stillman had settled the lawsuits with escrow funds. Trump also alleged that his reputation was damaged.[32] In March 2016, during Trump's U.S. presidential campaign, Republicans for the American Future Fund aired television advertisements in Florida against Trump for his involvement with Sater, in an attempt to prevent Trump from becoming the party's nominee.[14][33] The following month, a Florida appeals court ruled that Trump did not misrepresent his role in the project, after the two buyers in the initial lawsuit trial appealed the decision.[34]
