Ontario Court Places Trump Tower in Receivership After Years of Sluggish Sales

by San Antonio Attorney

The first Trump International Hotel and Tower in Canada, which opened in 2012, has been placed into receivership after its operators failed to keep up with the creditor payments for several months. That decision was made by the Court of Appeal in Ontario after the judges found out in October that the investors of the project had been misled. In a separate legal action, the owners sought to get rid of the Trump name from the structure and call off his company’s contract to run the hotel.

The building’s hotel rooms and apartments that were sold to many investors have time after time lost money, and will probably not be sold without losses. The great majority never had buyers to start with and has never been used.

What happened to the Trump Tower in Toronto is a notable blow to the brand in the country.

The building’s name is Trump, but Donald Trump is not the project developer. Talon International Development, owned by Alex Shnaider, paid to use Trump’s name and hired the real estate mogul’s company to run the hotel, expecting that Trump’s reputation would attract investors and hotel guests.

Due to a confidentiality agreement, Shnaider’s attorney refused to disclose what his clients think about how Trump’s company is managing the hotel. However, a few months ago, it was reported that Talon had lost interest in the Trump brand because of the billionaire’s move into politics.

Mitchell Wine represents 22 of the project investors who are filing lawsuits against Talon, its management and Donald Trump. According to Wine, when the project was launched in 2004, the Trump brand was very attractive to people who migrated to Canada. They were drawn to Donald Trump as the host of ‘The Apprentice’, he said.

The court ruling states that some of the investors were not actually aware about what they were investing in.

With the Trump Tower in receivership and the real estate developer unable to pay creditors, the biggest challenge is probably collecting the money awarded by the court, Wine said.

 

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