Hotel owners file suit to dump Trump name
WASHINGTON — The owners of a Trump-branded hotel in Panama sued President Donald Trump’s familyowned company in federal court Tuesday, alleging that the namesake business committed mismanagement and fraud.
The lawsuit includes previously confidential arbitration filings before the International Chamber of Commerce. It alleges that Trump Hotels tried to “bully, intimidate and harass” its way out of a $15 million arbitration claim. The owners, led by investment firm Ithaca Capital Management, are seeking to fire Trump’s company and abandon the Trump brand.
The lawsuit, filed in U.S. District Court for the Southern District of New York, was intended to terminate Trump’s 20-year contract, and alleged “gross negligence and potentially fraudulent conduct” by the Trump Organization, including “looted” bank accounts. The hotel currently carries a $1.9 million deficit in its reserve accounts, Trump’s opponents allege, because of improper use of funds.
Trump’s hotel company, meanwhile, alleged in arbitration filings that Ithaca and other hotel unit owners committed fraud and racketeering. That claim on behalf of Trump International Hotels Management argued that the owners acted in bad faith and lacked the authority to terminate the contract.
At stake in the dispute is control over the operations of the Trump International Hotel in Panama City, a 70-story luxury waterfront high-rise. The hotel has been struggling, with occupancy in recent days — a period considered peak high season — ranging from just 26 to 28 percent. Ithaca and its allies among the unit owners blame that performance on mismanagement and damage to Trump’s brand since he assumed the presidency. Trump attorney Alan Garten blames a widespread downturn in Panama’s hotel business.
Earlier Tuesday, The Associated Press reported that staff at the hotel ran off a team of Marriott executives invited to visit the property as part of the owners’ search for a company to take over the hotel’s operation from Trump. The head of Trump Hotels later called the head of Marriott to discuss the visit. Garten said the call was friendly.