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Solo In Chicago

...empowering the Second City's entrepreneurial legal community

Saturday, December 20, 2008

Recession = “Force Majeure”??

I don’t think I’ve dealt with a force majeure issue since first year Contracts but I am always on the lookout for some old fashion creative lawyering. And I found some reported recently regarding the new Trump development on the Chicago river

Those assertions are made in a fascinating lawsuit filed by Mr. Trump, the real estate developer, television personality and best-selling author, in an effort to avoid paying $40 million that he personally guaranteed on a construction loan that Deutsche Bank says is due and payable.

Rather than have to pay the $40 million, Mr. Trump thinks the bank should pay him $3 billion for undermining the project and damaging his reputation.

He points to a “force majeure” clause in the lending agreement that allows the borrower to delay completion of the building if construction is hampered by such things as riots, floods or strikes. That clause has a catch-all section covering “any other event or circumstance not within the reasonable control of the borrower,” and Mr. Trump figures that lets him out, even though construction is continuing.

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