FLORIDA – What happened when Panama condo owners tried to fire Donald Trump
FORTUNE.com: What happened when Panama condo owners tried to fire Donald Trump
The two are now cooperating.
By Michael Addady
October 12, 2015
The Trump Ocean Club, a Trump-branded condominium association, has attempted to fire Donald Trump following allegations of mismanagement, overspending, and undisclosed executive bonuses, the Associated Press reported.
During the four years that Trump Panama Condominium Management LLC managed a 70-story waterfront tower in Panama City, a team installed by the Trump family to run the operation was accused of “running up more than $2 million in unauthorized debts, paying its executives undisclosed bonuses and withholding basic financial information from owners,” according to the AP.
Eric Trump, the real estate mogul’s son, maintains that the building is “an amazing icon and, frankly, a great testament to America,” and he said the allegations are simply a way for the condo association to tarnish the Trump name and reputation.
The Trump Organization was in full control of both the condo development and the hotel, which the AP attributes to “legal chicanery.” Many condo owners live abroad, and a fine print clause in their contracts essentially gave up their votes to the Trump Organization, which could now vote on behalf of hundreds of owners. The Trump Organization also purchased a storage closet in the building, giving it the right to appoint its chief executive as president of the board, effectively giving the company total control.
It used that control to move money between the condo and hotel businesses, despite a contractual obligation that requires each component of the building to have separate bank accounts, which the company simply ignored. This resulted in a conflict of interest, which led to Trump’s management team racking up debts of over $2 million, the AP said. Read more: