November 1, 2016 / 7:12 PM / a year ago

UPDATE 1-Canada judge appoints receiver to oversee Trump-branded tower sale

(Adds comment from Trump lawyer, financial details, other background)

By Alastair Sharp

TORONTO, Nov 1 (Reuters) - A Canadian judge on Tuesday appointed a receiver to oversee the sale of a Toronto hotel-condo tower bearing the name of U.S. presidential candidate Donald Trump after the tower’s developer failed to make payments on its loans.

The decision brings the 65-storey Trump International Hotel & Tower, the first Trump-branded hotel in Canada, one step closer to a change of ownership after several setbacks since it opened its doors in 2012.

In his presidential campaign, Trump has emphasized his credentials as a wealthy businessman, while his political opponents have long pointed out that his career includes business failures. The Toronto project showed the limits of Trump’s brand in Canada.

The Toronto tower was developed by Talon International Inc, which licensed the Trump brand and hired a Trump-owned company to manage it.

Since its launch, less than half of its residential condos have been sold by Talon and the hotel’s occupancy rates have been lower than some investors in the rooms had hoped.

Some hotel unit buyers have said they were misled into investing and have launched lawsuits against Talon, which Talon has said are without merit.

The Trump Organization said on Tuesday it does not expect its long-term agreement to manage the property in Toronto’s financial district to be affected by the latest legal proceedings.

“Regardless of any financial restructuring, we will continue to operate the property under our luxury hotel brand flag,” Alan Garten, general counsel for the Trump Organization, wrote in an email.

JCF Capital ULC, which on Sept. 29 bought the C$301 million ($224.5 million) owed on the tower’s construction loan, said in a filing it expected to retain the Trump Organization as the tower’s manager during receivership.

JCF last week filed a request in Ontario for a court-run sale of the building. It has also said it intends to offer a credit bid on the property, exchanging its debt for ownership if there are no better offers.

JCF said in its court filing that Talon and related companies have been in default on the loan since July 2 last year. Talon, which did not oppose JCF’s application, could not immediately be reached for comment on Tuesday.

Justice Glenn Hainey of the Ontario Superior Court of Justice agreed with JCF’s request to appoint FTI Consulting Canada Inc as receiver, but postponed other decisions in the case until later this month.

Editing by Jeffrey Hodgson and Matthew Lewis

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below