The Trump Organization, a company owned by President Donald Trump’s family, held talks with Deutsche Bank AG DB and Florida county about deferring payments on existing loans and financial obligations.
What Happened
The coronavirus outbreak has forced the closure of some Trump Organization properties, leading to the President’s company seeking relief in the form of delayed payments on loans and other financial obligations from its primary lender Deutsche Bank, according to The New York Times.
The company, which owns the 300 acres Trump International Golf Club in West Palm Beach Florida, also engaged with Palm Beach County to ascertain if it still expected monthly payments on land the Trump Organization leases from the county for the golf club.
Eric Trump, Trump’s son and manager of the family business, said, “These days everybody is working together.” Reflecting on the nature of the crisis, he remarked, “Tenants are working with landlords, landlords are working with banks. The whole world is working together as we fight through this pandemic.”
Why It Matters
The Trump Organization has been hit hard by the viral pandemic. Its hotel on the Las Vegas Strip has been temporarily closed, and it has had to cut staff and services at its hotels in New York and Washington. The golf clubs in Florida and New Jersey are also shut, and so is the Mar-a-Lago club in Florida.
Unlike other major hotel chains that have largely closed operations, some of the Trump Organization’s businesses are open due to a total absence of government orders.
The CARES Act, which bails out other companies in a similar position with monetary relief to the tune of $500 million, cannot be used by Trump’s businesses as the law bars the President and his family from accessing the Treasury Department administered relief funding.
Trump Organization owes relatively little compared to other real industry rivals. Deutsche Bank had lent Trump and his companies $2 billion in 1998, and at the time of being elected the president, Trump owed the German bank $350 million.
Trump had previously sued Deutsche Bank for engaging in predatory lending during the 2008 financial crisis. He described the financial crisis as an “act of GOD” and claimed $3 billion when the bank tried to collect the millions owed to them.
The Trump Organization’s 1996 lease agreement with Palm Beah County contains clauses such as “force majeure” or “act of GOD.” County officials are exploring whether these provisions would allow the President’s company to delay payments due to the pandemic.
Price Action
On Thursday, Deutsche Bank closed the regular session 1.09% higher at $6.02. The shares were unchanged in the after-hours session.
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