Trump Org. sues company in NY court that bought Trump D.C. hotel, seeks $31.5M
1100 Pennsylvania Avenue (Credit - Google)
The Trump Organization through the entity DJT Holdings LLC filed a lawsuit yesterday in New York State Supreme Court in Manhattan alleging the company that paid $375 million for the leasehold on the Old Post Office at 1100 Pennsylvania Avenue in Washington, D.C., defaulted on a $28 million loan the Trump Organization provided the buyer to cover the payment of taxes related to the 2022 transaction. The filing alleges the individual loan borrowers signed confessions of judgment, which were included in the court papers. The Trump Organization is seeking $31.48 million.
Case LINK
Court filings represent the position of one party and are not necessarily accurate or complete.
The Wall Street Journal reported in February 2024 that the hotel buyers, Miami-based CGI Merchant Group, had defaulted on a $285 million loan obtained as part of the acquisition.
CGI Merchant Group in 2022 paid $375 million for the ground lease to the property, then known as the Trump International Hotel, and now branded as a Waldorf Astoria under the new ownership.
The filing says that CGI Merchant Group did not have the funds to cover the transfer, recordation and mortgage recording taxes related to the purchase, so the Trump Organization made a loan for $28 million. To secure the loan, the individuals Raoul Thomas, identified as a manager of the CGI entity, and Euclid Walker, identified as “upon information and belief, also a principal,” signed promissory notes, the filing alleges.
The $28 million loan was divided into two pieces, with $13 million due in November 2022, a few months after the closing, and $15 million due after certain unspecified events transpired. CGI only made one payment of $100,000 toward the $13 million piece, despite three extensions. The $15 million also remained unpaid. So by a letter dated May 21, 2024, the Trump Organization notified the borrowers that the loan was in default, and the entire principal of $27.9 million was due, plus default interest, for a total of $31.48 million.