Wednesday, August 4, 2010

Donald Trump sued for fraud

NEW YORK - DONALD Trump and the promoters of his Trump SoHo hotel-condominium were sued by buyers who accused them of fraudulently touting out-sized sales figures to encourage them to buy units and inflate the project's financial health.

The lawsuit by 15 plaintiffs was filed on late Monday in Manhattan federal court, less than four months after the 46-storey building opened and three months after the offering plan went effective, allowing closings to begin.

Trump SoHo is a venture between the Trump Organization, which manages the building, and Bayrock Group and Sapir Organization, which formed its sponsor Bayrock/Sapir Organization. The smallest units start at $1.2 million (S$1.62 million).

The complaint said the defendants in sales pitches and to the media during the first 18 months of marketing advertised that the building was '30, 40, 50, 60 per cent or more sold.' Instead, when the offering plan went effective, buyers learned that just 62 of the 391 units, or 16 per cent, had been sold, the complaint said. A minimum of 15 per cent was needed for the plan to go effective.

In a separate statement, Donald Trump said the building has 'done exceedingly well' since its opening. 'This case is simply a matter of buyers' remorse,' he said, referring to the lawsuit. Other defendants include Trump's children Ivanka Trump, Eric Trump and Donald Trump Jr.

Trump SoHo is unusual in that owners are limited to staying in their units no more than 120 days a year and no more than 29 consecutive days in any 36-day period. Units are rented to hotel guests when owners are away. -- REUTERS

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