TRUMP HOTEL PANAMA: A Deal Gone Sour
THE ATTEMPT to remove Donald Trump’s hotel company from the management of the hotel in Punta Pacifica has turned into a bitter dispute with accusations of bad financial practices, and pressure exerted on the Marriott Hotel chain by the Trump organization.
The hotel and apartment complex has been mired in problems since it was constructed in 2011, with a bankruptcy, purchasers of units involved in multiple lawsuits, and vendors accused of fraudulent practices.
From the start, it has had problems selling sections. Occupancy rates are so low that some owners do not receive income from their properties and they must pay the maintenance costs out of their pockets.
Last week Trump Hotels staff ordered a team of Marriott managers out of the building, where they were staying as guests while the search is underway for a new manager, according to people familiar with the matter, report numerous US media.
The hotel’s owners accused Trump Hotels of unfair management and financial malpractice in a $15 million arbitration claim. The company owned by the president of the United States responded with a $200 million counterclaim and refused to deliver the property accounts.
According to two sources, the head of Trump Hotels, Eric Danziger, called the CEO of Marriott, Arne Sorenson, to complain about the visit. In general, Marriott avoids property with disputes between owners and managers. But the call from a senior manager of Trump to the CEO of Marriott, who manages over 6,000 hotels raised the awkward question of how American companies interact with a business owned by the president.
Like many international companies, Marriott has raised business issues and interests on regulations with the Trump government.
Federal employees who travel and offer conferences for the government paid to use their properties and Marriott has put pressure on the government and Congress on tourism issues, trade and legal restrictions on properties in Cuba, among other matters.
The legal advisor to the Trump Organization, Alan Garten, said Sorenson did not pressure Marriott. “They appreciated that we explained to them that we have a valid contract.”
The issue highlights the potential ethical issues raised by Trump’s decision not to divest from their business, said Larry Noble, head of the Campaign Legal Center, a Washington-based public interest group that studies issues about democracy. “I do not know if they have a valid contract or not,” Noble said. “But if you’re a big company, you’d really have to think twice before getting into a fight with one of the president’s companies, “he added.
Discrete agreements
Since Trump took office, Trump hotels in New York and Toronto have reached discreet agreements to distance themselves from the Trump brand. But the dispute in Panama starts to look like a full-fledged fight says an Associated Press (AP) report.
In a letter to other owners, the investor who heads the board of directors of the owners f the Panama building accused Trump Hotels of “brazen unfair administration, breaking of contract, illegal appropriation and breach of fiduciary duties “.
“Our investment has no future as long as the hotel is managed by an incompetent operator whose mark has been stained without remedy, “
Orestes Fintiklis, managing partner of the Miami-based firm Ithaca Capital said in the letter that Trump Hotels refuses to keep its last vestiges of dignity and abandon our property peacefully.
Trump Hotels, meanwhile, accused Ithaca of cheating the other owners and liquidating the contract illegally. “Unfortunately, it’s you, the owners, who will ultimately bear responsibility for the bad acts of the Lord Fintiklis and his henchmen, “wrote the executive vice president of Trump Hotels, Jeff Wagoner.
