TORONTO, Nov. 25, 2012 /CNW/ - Some of the investors in the Trump
International Hotel & Tower Toronto ("Trump Hotel"), in a last-bid
effort to obtain immediate assistance before their looming November 29th closing dates, have sought the assistance of the Ontario Securities
Commission ("OSC"), which oversees the offering of investments in
Ontario. The investors are asking the OSC to launch a formal
investigation into the investment scheme offered as part of the Trump
Immediate action by the OSC has become urgent in light of the fact most
of the investors have a November 29, 2012 closing date, and every
Canadian bank has refused to offer financing to investors. Though
promised by the developers of the hotel, Talon International Inc., that
the hotel units could be easily financed as residential condominium
units, and the agreements structured as such, investors have come to
learn that Canadian banks are treating the hotel project as a
commercial enterprise, and have all refused financing as a condominium
To make matters worse, the investors have also discovered that their
investments are running at losses of upwards of $175 a day per unit,
due to the current shortfall between the maintenance fees and the hotel
With a looming closing date of November 29, 2012, and banks refusing
financing, investors are faced with either having to either come up
with substantial amounts of cash to close or resort to secondary
financial institutions which will only provide partial financing for
this project as a commercial investment at prohibitively high interest
Some of these investors have already commenced a multi-million dollar
lawsuit against Talon and their directors, as well as a number of Trump
organizations and their directors, including Donald Trump Sr.
Without conventional mortgage financing, these investors will be unable
to close on the hotel units on their November 29th closing date. Talon has already initiated legal proceedings against a
number of investors who have tried to rescind their agreements and/or
have notified Talon of their inability to close on November 29th. Meanwhile, the plaintiffs' claims allege that investors were persuaded
into investing in the Trump Hotel on the basis of alleged negligent or
reckless misrepresentations by all the parties involved, and that the
promises and projections offered were not only allegedly inaccurate,
but in contravention of securities regulations.
Back in 2004, when the hotel project was first being planned, Talon
sought permission from the OSC to be exempt from the strict (and
costly) regulatory requirements for commercial investments, and
provided a number of promises and conditions to the OSC in order to
obtain those exemptions.
In granting an exemption, the OSC made it a strict condition that Talon
and Trump Hotel not market the hotel units as a cash-flow investment.
Immediately thereafter, the plaintiffs allege that the developers
ignored those promises and actively marketed and sold hotel units on
the representation of a sizeable return on investment, proposing
anywhere from 5% to more than 20% returns as soon as the hotel opened.
The plaintiffs in this case, represented by the law Toronto-based law
firm of Heydary Hamilton PC, have formerly requested that the OSC
conduct a full and immediate investigation to determine whether or not
the investment scheme is in violation of the Securities Act, or the 2004 OSC ruling. If so, the OSC has the capacity to immediately
order that all further transactions relating to the hotel units, and
any closings, be halted.
Meanwhile, Ontario courts have declined to hear the matter on an urgent
basis, notwithstanding the upcoming November 29th deadline, and have pushed any preliminary hearing of this dispute into
Although many of the investors have lost all hope of a timely response
in light of looming closing date, Javad Heydary, the lead counsel for
the plaintiffs' is optimistic as to the OSC':
"I have full confidence in the Ontario Securities Commission in that
they will take all the necessary steps which, in our opinion, requires
a close examination of this project. Whether the Commission decides to
act or not is not for us to comment on, but we (as lawyers acting for
the investors) do know that they will give this matter the serious
attention that the circumstances mandate, and for that the Commission
has our clients' appreciation and gratitude - even if the Commission's
final decision is not one that involves the immediate intervening steps
as requested by our clients."
This press release is issued on behalf clients represented by Heydary
Hamilton PC including those named in Ontario proceeding Kim et al. v. Trump et al., CV-12-468175.
More information on the plaintiffs' claim can be found at www.tlawsuit.ca.
Statement of Claim: http://www.heydary.com/tlawsuit/documents/courtpleadings/Issued%20Statement%20of%20Claim%20%282012%2011%2021%29.pdf
All allegations therein are unproven until determined by a court of law.
2004 OSC Ruling: http://www.osc.gov.on.ca/en/SecuritiesLaw_ord_20040611_232_taloninternational.htm
A sample Trump Tower presentation, including investment projections:
SOURCE: Heydary Hamilton Professional Corporation
For further information:
If you are a member of the media, and are seeking more information on the lawsuit or the OSC investigation, please contact Javad Heydary or Jeffrey Landmann at email@example.com or by calling 416-972-9001.