Trump Soho - Complaint pt 1, August 2010

8/6/2019 Trump Soho - Complaint pt 1, August 2010

http://slidepdf.com/reader/full/trump-soho-complaint-pt-1-august-2010 1/84

UNIT ED STATES D IS T R IC T C O U R TSO UT HE RN D IST R IC T OF N E W YORK

PA LM E R G A R D EN S , LLC, RA CH EL G ER ST E IN ,

JOYCE GE RS TE IN, H ER BE R T G ER ST E IN , A LA NMALTZ, JA NE T M AL TZ , H U B E R T TSAI,CHRISTINE SINGH, X UE FE NG , R AN D A L L A.MECKEL, H EN RY GR OS S , B E A V E R METAL, LLC,ACACIO RO DR IGU EZ , C R E D IB O X U N IVE RS AL ,SL, and FE LI S A H ER N A N D E Z

-a g ain st-

Pla int ffs

BA YR OC KI S AP IR O RG AN IZ A T ION LLC, D O N AL DJ. TR UM P, ALEX S AP IR , T EV FIK ARIF, 246SPRING ST RE ET H O L D ING S II, LLC,BA Y R O C K /SA PIR R E AL TY LLC, B A Y R O C KSPRING STREET, LLC, B A Y R O C K G RO UP , LLC,JULIU S SC H W AR Z, T R U M P IN T E R N A T ION ALHOTELS M A N A G E M E N T LLC, TR UM P M A R KSSOHO LLC, D ON A L D T R U M P JR., IVA NK ATRUMP, ERIC T R U M P , P R O D IG YINT ER N A TIO NA L N Y C, LLC, RO DR IG O N INO ,CORE G RO UP M A R K ET IN G LLC, SHAUN O SH ER ,

THOMAS PO ST ILI O and A K E R M A N SEN TE RF IT TLLP, as E SC RO W A GE NT ,

D efe nd ant s .

q! WOODC as e No.

1 0 C IV

JU R Y TR IALDE MA N DE D

Pl a int iffs , th ro u gh the ir at to r ney s , A da m L ei tm a n Bailey, P .C ., fo r th e ir C om pla int

ag a in s t the De fen dan ts al lege as follows:

C O M P LA INT

Co m pl ain t Page 1

Case 1:10-cv-05830-KMW Document 1 Filed 08/02/10 Page 1 of 84



T A B L E O F C O N T E N T S

PR EL IM IN A RY S T A T E M E N T 5

THE P LA IN TIF FS 9

The Pa lm e r Ga rde n P lai n tif fs 10

The Ma ltz P la inti f fs 12

The T sa i-S ingh Pla inti ffs 13

The F e n g- M eck e l- G ro ss Pla in t iffs 14

The B ea v er Metal P lain tiff s 16

The C re d ib o x Pl a int iffs 17

Purchasing and In ves ting Pla in t iffs 19

THE D EF E N D A N T S 19

The S pon sor De fen dan ts 19

The Trump D efe n da n ts 23

The Pr o di g y D ef e nd ant s 25

The Core De fen d an ts 26

The E scro w A ge n t 28

M isr e pr e se n tin g and C ont rol De fen dan ts 28

Other N o n- P ar ty Tru mp Soho Re p re sen tativ es 32

JU RI SD ICT IO N A ND V EN UE 36

THE TR UM P SOHO D E V E L O P M E N T 37

The M arke tin g o f the T rum p Soho 37

The O ffe ring Plan and D oc u m ents 38

Th e Res tric tiv e D ecla ra ti o n 40

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The C on d om ini u m De cla ratio n 43

The C o n do m in ium B y- L aw s 44

The Unit M an ag em ent A g re em ent 45

FALSE AND M IS LE A D IN G ST A T E M EN TS M AD E BY D EF E N D A N T S 46

Actual Un it Sales by Date 46

False Sta tem en ts Made to the P alm er Ga rd e n s Plaintiffs 48

False S tate me n ts Made to the M al tz Pl ain tiff s 52

False Sta tem ent s Made to the Ts a i-S ing h Pla inti ffs 53

False St ate m en ts Made to the F e ng -M eck e l-G ro ss Pl ain tiffs 55

False St a tem en ts M ad e to the Bea ve r M etal P lai n tif fs 58

False S tate me nts M ad e to the C re dib ox Pla inti ffs 61

A ddi tion al Fa lse S tate me n ts Made to the Press and R el ianc e by Pla inti ffs 65

Reliance on D ef e nd a nts ’ False Sta tem en ts by A dd itio na l P urc h as ers 70

THE MAY 5, 2010 F ILI N G R EV EA LIN G THE FRAUD 72

The M in imu m Sales P er cen tag e R equ ired U nd er the M ar tin A ct Re g u la tio n s and

the Plan 72

The Eff ect iven ess A m end m e n t and the S ap ir A ffi d av it 76

The Drastic S ta ff Cuts Re ve a led by the T ent h A m en dm en t 77

THE D E FE ND AN TS ’ FR AU D AND THE M O T IV A TI O N B EH IND IT 81

The Need to P ro je c t Success Th rou gh False S ta t eme nt s 81

False St a tem en ts of the Pro dig y De fen d an ts 85

False S tate me nts o f the Core D efe n da n ts 92

False S tate m en ts of the Tr u mp D efen da n ts 96

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False S ta tem ent s o f the S p o ns o r D ef e nda n ts and th e ir Ag ent s 102

The Control D ef e nda nt s ’ Res pon sib ilit y for the False S tate m en ts 111

The Defendants’ R eg u lar M oni tori ng and Co rre c tio n o f N ew s R epo rts 112

THE TRUMP SOHO O F F E R IN G AS A SE CU RI TY 115

NO N -EX EM PT ION AN D N ON -C O M PL IA N C E WITH ILSA 122

No Full E x em pti on from ILSA un de r 15 U.S.C. §1 702 (a ) A pp lies 123

No Other S tatu tor y or R eg u lat o ry ILSA Ex em ptio n A p pl ie s 124

The Right to Rev ok e U nde r 15 U.S.C. §1503(d) 127

The ILSA Pro per ty R ep ort’ s Fa ilu re to Disclose the R ev o ca tio n O ptio n 127

CLAIM I — ILSA D EC EPT IV E SALES P RA C T IC ES , 15 U.S.C. § 1703(a)(2) 134

CLAIM Il -C O M M O N LAW FR AU D 140

CLAIM III - SE C U R IT IES FR AU D — 1934 A CT § 10(b) & RU LE IOb-5 142

CLAIM IV - SE C U R IT IES CO NT RO L P E R S ON S - 1934 A C T § 2 0( a ) 147

CLAIM V — S E C U R ITI E S F RA UD — 1933 A CT § 12(a)(2) 149

CLAIM VI - SE C U R IT IES C O N T R O L PERSONS 1933 AC T § 15 153

CLAIM VII - D E C E P TI V E B U S IN ES S PR AC TI CE S , GBL § 349 et se q 154

CLAIM VIII - BR EA CH OF CO N T RA CT 158

CLAIM IX - ILS A P RO PE R T Y R E PO RT OM IS S IO N, 15 U.S .C . § 1702(a)(1) 161

CLAIM X - ILSA R E V O C A T IO N , 15 U.S.C. § 1703(d) 164

CLAIM XI-

IN JU N C T IO N TO HO LD AND RE FU ND E SC R O W 165

R EQ U E S T FOR R E LI E F 167

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PREUMINARY STATEMENT

This action seeks to redress the substantial and ongoing pattern of fraudulent

misrepresentations an d deceptive sales practices that the Defendants undertook

against the Plaintiffs, inducing them to enter into agreements to buy hotel-

condominium Units at the Trump Soho Hotel Condominium New York (the

Condominium”), then under construction at 246 Spring Street, New York, New

York 10013.

2. The hotel-condominium development (the “Trump Soho”) was announced with

great fimfare by celebrity real estate mogul Donald J. Trump on the 2006 finale of

the fifth season of his television show The Apprentice, and has been a signature

project of Trump’s three children, Donald Trump Jr., Ivanka Trump and Eric

Trump, who have both an equity interest in the project and have publicly used the

project to try to establish some independent credibility in the real estate business

beyond their mere status as Trump’s children.

3. The Condominium sponsor, Bayrock/Sapir Organization LL P (the “Sponsor”) is

jointly owned by Donald Trump, Alex Sapir and Tevfik Aviv, each of whom had

and has a significant personal, financial, and reputational interest in having the

project succeed by selling condominium Units.

4. The Sponsor and its affiliates and sales agents — the Defendants — stood to make

substantial profits if large numbers of the Condominium Units could be sold, but

could face disaster if they went unsold.

5. As a result, from the very beginning of their marketing of the Units in September

2007, the Defendants (other than Akerman Senterfitt LL P (the “Escrow Agent”),

Complaint Page 5




sued o nl y in its role as es cr ow a ge n t h o ld in g the Plaintiffs’ c ont ract dep osi ts)

en g ag ed in a coor din a te d p att e rn o f fa lse ly ove rsta tin g the num be r and p e rce nta ge

of T rum p So ho U ni ts so ld, and o the r in dica tor s o f ma rke t int er e st , to e nc o ur a ge

the P la int if fs and oth er pot e nti al pu rcha ser s to buy U n it s in w h a t th ey cla im e d to

be a h ig h ly s ucc ess ful sa le s e ffo rt.

6. Over the fir st y ear and a hal f o f m ar k et in g the Units ( the p eri od that th e P la in ti ff s

signed co n tra c ts to buy thei r Units and then m ad e a dd itio n al de pos its to p res erv e

their co ntr act rights), an d d esp ite b ad ly lag g in g sa le s, the D ef e nd a nt s m a d e

increasing rep res enta tio n s abo ut the pe rce n ta g es of Units so ld — st a tin g th a t the

Trump Soho was 30, 40, 50, 60 p er cen t o r m o re so ld — both to w orld wi de m ed ia

sources and to in d iv idu a l p u rc h as ers and p o te n tia l p urc has ers , inc ludi n g th e

Plaintiffs.

7. The Defendants’ cla im s o f high p erc ent age s of Units sales w ere v er y im po rta n t to

the P la in ti ff s and oth er p urc has ers he arin g th em bec aus e ro bu st sa le s are a st ro n g

in d ic a tio n o f the dev elo pm ent ’s va lu e and th at the U ni ts are well p ric ed in the

m ark etp lac e .

8 . More s ign ific a ntl y , since a sub sta n tia l p ar t of the U n it’ s v a lu e w as in the a bil i ty to

rese ll it at some late r ti m e in the sec o nd a ry m a rk et , and if the Sp ons or d id not sell

out the Units, the bu y er w o u ld be c om pe ting w ith th e S pon sor on resa le , a high

sales pe rcen tag e re p or ted b y th e Sp ons or w as v it al to the b u ye r’s be lief in his or

her a bil ity to eve ntu ally re sell his or he r in v es tm en t.

9. Indeed the fe der a lly -req uir ed pro per ty d iscl osu re repo rt di s tri b ute d to T ru m p

Soho pu rc h as ers ex pre ssly c a ut io n s: “R esa le o f yo ur Hotel Suite U n it m ay be

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difficult or impossible until our projected sell-out of the condominium, since you

may thee the competition of our own sales program and local real estate brokers

may not be interested in listing your Hotel Suite Unit.”

10. Further, the higher the percentage of Sponsor ownership in a condominium

development, the riskier the investment because of the greater chance and

consequences of Sponsor default.

11. Indeed, many banks will not lend on condominium Units where the Sponsor

ownership is more than 30 or 50 percent.

12. Despite the extravagant claims of the percentage of Units sold made by Trump

Soho representatives, when construction was complete the Sponsor was forced to

reveal in a filing required under New York’s Martin Act, New York General

Business Law (“GBL”) § 352 et seq., that it had only entered into contracts to

sell 62 out of the 413 Units originally offered (later reduced to 391 Units), or just

over 15%.

13. The 15% number is highly significant because under the Martin Act’s regulations,

the Sponsor would have been unable to declare the condominium offering

effective and close on the sales of the Units unless it had secured contracts to sell

15% of the Units. Similarly, in the Trump Soho’s offering plan, the Sponsor

represented that it would not declare the offering effective if fewer than 60 Units

were under contract.

14. What this means is that if the Sponsor had induced just three fewer purchasers to

sign contracts (and possibly just one fewer), the project would have foundered,

Complaint Page 7




and all purchasers could have rescinded their contracts and obtained lull refunds

under New York law.

15. Thus, no t only were the Plaintiffs individually misled into signing their contracts

and submitting their additional deposits, the Defendants collective efforts to pump

up sales through false an d misleading statements caused all buyers to miss an

option to revoke their contract that they all should have had in the absence of

fraud.

16. Moreover, although the Plaintiffs were promised a hotel fully staffed to provide

high quality services, severe budget cutbacks by Trump Soho management mean

that the services the Plaintiffs would receive do not match what was promised.

17. A key aspect of the Trump Soho’s sales pitch was that, because zoning

restrictions prohibited buyers from staying in their Units for more than limited

periods, each buyer’s Unit would be rented to the public as a hotel room during

the time they were not in occupancy, with the buyers receiving the rental revenue

(less charges and expenses) as an investment return on their Unit purchases.

18. As a result of these actions by the Defendants, the Plainitffs are seeking rescission

of their purchase agreements refund of all deposits they have made (a total of

$1,749,861.00), compensatory and punitive damages, interest, costs and

attorney’s fees, and other relief under the Interstate Land Sales Full Disclosure

Act (“ILSA”), 15 U.S.C. § 1701 etseq., common law fraud, breach of contract,

the Securities Exchange Act of 1934 (the “1934 Act”), 15 U.S.C. § 78a et seq.,

the Securities Act of 1933 (the “1933 Act”), 15 U.S.C. § 77a et seq., an d th e

New York Deceptive Business Practices Act, GBL § 349 et seq.

Complaint Page 8




‘[ lI E P LA IN T IF F S

1 9 . Each of the P la in ti ffs , eit her d irec tly o r ind irec tly th ro ug h a b u sin e ss entity, is a

co n tra c t ve n de e to pu rch a se a Hotel Suite U n it (a “Unit”) o f the C o nd o m iniu m

und er a p u rc h as e a gre eme nt (a Pu rch ase A gr e em ent ”) w it h the S po n so r.

20. Each of the Units was o ffer ed and so ld p u rsu an t to a Co mm er c ial Co ndo min ium

O fferi n g P la n for T ru m p Soho Co nd o mi niu m New York (th e “Of feri ng P la n ” o r

P la n ”), as am en d ed from tim e to time, issu ed by the Sponsor.

21. Each P urc ha se Agr eem en t is on an ide n tic a l form as p ro v id ed in the O ff e rin g

Plan, wi th p rov isio ns id en ti ca l in sub sta n ce o the r th an bu sin es s te rm s su ch as Unit

number, pur cha se price, d ep osi t am oun t, d at e an d the like.

22. Each P u rc h as e A gre em ent req u ir es the pu rch ase r to su bm it an initial d ep o sit (an

“Ini ti al De p osi t” ) o f 10% o f the pu rch ase pr ic e o f th e U n it to be h eld in escr ow by

the E scr o w A ge nt si m ul tan eou sly w ith the su bm iss ion of the Pu rch ase A gre em e nt

to the S pon sor , exc ept th a t in on e ins tan ce de tail ed below, a pur cha ser was

pe rmi tted to m ak e an Initial D ep o sit o f 5% of the p urc h as e price, a First

A d di tion a l D ep o si t o f an add itio na l 5% and the n a Second Initial D epo sit o f 10%.

23. Each Pu rch a se Ag reem en t also requ ir es the p ur c ha ser to su bm it an ad dit ion a l

de p o si t (an “A d di ti on a l D ep os it ”) of 10% o f the p u rc ha se p rice of the U n it to be

held in esc row b y the Es cro w A gen t on o r be fo re a date six m o n th s afte r the d ate

o f the P urc h as e A gre em ent (e xc e p t as no te d a b ov e and d et ai le d bel ow ).

24. The In iti al D ep os it and th e A d di tion al De p os it (or F irs t and Se con d A ddi tion al

Deposit, as ap pl ic ab le) (c ol lect ive ly, the “D ep os it” ), to tal i n g 20% o f th e pu rcha se

pr ice, a re to be h eld un der an escr o w ag ree men t d ate d Ju n e 26, 2007 bet w ee n the

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Escrow A gent and the Sp on sor (the “Esc ro w A gr eem en t”) unt il re le ase d w ith all

accr ued int ere st un de r the te rm s of the Escrow A gre em en t.

T he P alm er G ar d en P lai n tif fs

25. Pl aint iff Pal me r G ar den s LLC (“ P al m er G ard en s”) is a C alif orn ia lim ite d liab ilit y

com pa ny w ith an ad dre ss of 660 Sun set Blvd. #2 01, Los A nge les, Ca lifo rni a

90028.

26. Under a Pu rch ase Ag ree m en t da te d Jan uary 28, 2008, Palm er G ard ens c ont rac ted

to purc has e Hotel Suite Unit 2509 of the C on dom ini um from th e Spon sor for a

pu rc hase pri ce of $2 ,136 ,00 0.0 0 unde r the ter m s and co nd itio ns thereof .

27. Pal m er G ar den s sub mit ted an Ini tial D ep osi t o f $213,60 0.0 0 pa yab le to the

Escrow A gent w ith its subm is sion of the Purc has e Ag ree me nt to the Spons or.

28. Pa lm er G ard ens sub m itt ed an A ddit ion al D ep osi t of $213 ,6 00.00 pa yab le to the

Escrow A gent on or abou t the da y it was due, Jul y 28, 2008.

29. On inf o rm ati on and belief, the Escro w A gent hold s a total D ep osit of

$427 ,20 0.0 0, pl us acc rue d in te re st, in es cro w for the ben efi t o f Pa lme r G ard en s

und er th e Esc row A gre em ent.

30. P la in ti ff R ach el G ers tein is a C alif orn ia res ide nt w ith an addres s o f 660 Sunse t

Blvd. #201, Los A ngel es , C alif orn ia 900 28.

31. Pla in ti ff R ac hel G er stei n is the m anag in g m em ber o f Palm er Ga rde ns and ow ns

50% of its equi ty m emb ers hip interests.

32. P lain tiff Jo yce G ers tein is a Flo rid a re sid ent w ith an a ddr ess of 660 Su nse t Blvd,

#201, Los A ngel es, C alif orn ia 900 28.

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33. PlaintitiJoyce Gerstein is a member of Palmer Gardens and owner of 49% of its

equity membership interests.

34. Plaintiff Herbert Gerstein is a Florida resident with an address of 660 Sunset

Blvd. #20 1, Los Angeles, California 90028.

35. Plaintiff Herbert Gerstein is a member of Palmer Gardens and owner of 1% of its

equity membership interests.

36. Rachel Gerstein conducted the investigation of the purchase of the Trump Soho

Unit on behalf of Palmer Gardens, Joyce Gerstein and Herbert Gerstein.

37. Rachel Gerstein communicated statements and representations made to her and

reviewed by her regarding the Trump Soho, and her analyses and summaries

thereot to Palmer Gardens, Joyce Gerstein and Herbert Gerstein.

38 . In reliance on the representations made to Rachel Gerstein, Rachel Gerstein,

Joyce Gerstein and Herbert Gerstein agreed to purchase a Unit of the Trump Soho

through Palmer Gardens.

39. In reliance on the representations made to Rachel Gerstein, Rachel Gerstein,

Joyce Gerstein and Herbert Gerstein contributed the funds used to make the Initial

Deposit and the Additional Deposit to Palmer Gardens in proportion to their

membership interests in Palmer Gardens.

40. In reliance on the representations made to Rachel Gerstem, Palmer Gardens

agreed to purchase a Unit of the Trump Soho

41. In reliance on the representations made to Rachel Gerstein, Palmer Gardens

deposited the funds used to make the Initial Deposit and the Additional Deposit.

Complaint Page 11




42. In reliance on the representations made to Rachel Gerstein, Palmer Gardens

entered into its Purchase Agreement.

The Maltz Plaintiffs

43. Plaintiffs Alan Maltz and Janet Maltz are Florida residents with an address of 220

Grand Pointe Drive, Palm Beach Gardens, Florida 33418.

44. Under a Purchase Agreement dated October 27, 2007, Alan Maltz and Janet Maltz

contracted to Purchase Hotel Suite Unit 2006 of the Condominium from the

Sponsor for a purchase price of $1,244,000.00 under the terms and conditions

thereof.

45 . Alan Maltz and Janet Maltz submitted an Initial Deposit of$ 124,400.00 payable

to the Escrow Agent with its submission of the Purchase Agreement to the

Sponsor.

46. Alan Maltz and Janet Maltz submitted an Additional Deposit of$124,400.00

payable to the Escrow Agent on or about the day it was due, April 25, 2008.

47. On information and belief, the Escrow Agent holds a total Deposit of

$248,800.00. plus accrued interest, in escrow for the benefit of Alan Maltz and

Janet Maltz under the Escrow Agreement.

48. En reliance on the representations made to them, Alan Maltz and Janet Maltz

agreed to purchase a Unit of the Trump Soho.

49. In reliance on the representations made to them, Alan Maltz and Janet Maltz

deposited the funds used to make the Initial Deposit and the Additional Deposit.

50. In reliance on the representations made to them, Alan Maltz and Janet Maltz

entered into their Purchase Agreement.

Complaint Page 12




The Tsai-Singh Plaintiffs

51. Plaintiff Hubert Tsai is a California resident with an address of 3141 Michelson

Drive, #1202, Irvine, California 96212.

52. Plaintiff Christine Singh is a New York resident with an address of 3274 Harbor

Court, Baldwin Harbor, New York 11510.

53. Under a Purchase Agreement dated September 7. 2007, Hubert Tsai and non-

party Anthony Tsai contracted to purchase Hotel Suite Unit 902 of the

Condominium from the Sponsor for a purchase price of $1,062,000.00 under the

terms and conditions thereof

54. Hubert Tsai and Anthony Tsai submitted an Initial Deposit of $106,200.00

payable to the Escrow Agent with its submission of the Purchase Agreement to

the Sponsor.

55. Hubert Tsai and Anthony Tsai submitted an Additional Deposit of $106,200.00

payable to the Escrow Agent on or about the day it was due, March 7, 2008.

56. Anthony Tsai assigned his rights an d obligations under the Purchase Agreement

to Plaintiff Christine Smgh under an Assignment and Assumption of Agreement

which was dated as of May 15, 2008, but which was signed by the parties in or

about September 2008.

57. In connection with her assumption of Anthony Tsai’s interest in the Purchase

Agreement, Christine Smgh paid Anthony Tsai $106,200.00 representing

Anthony Tsai ‘s interest in and contribution to the Initial Deposit and Additional

Deposit, and thereby assumed Anthony Tsai’s interest in the Initial Deposit an d

Additional Deposit.

Complaint Page 13




58. On info rm atio n and belief, the Escrow A gen t hol ds a tot a l D ep o si t of

$24 8,8 00. 00, plus ac cru ed interest, in esc ro w (hr th e bene tit o f H ube rt Tsa i and

C hrist in e Singh unde r the E sc row A gr eem ent .

59. In re lia nce on the rep rese nta tion s m ade to th em , Hubert T sa i and An tho ny Tsai

agre ed to pur cha se a Unit of the Tru m p Soho.

60. In re lia nce on the re pre sen tati ons m ade to the m , H ub ert Tsai and A nthon y Ts ai

de pos ite d the funds u se d to m ak e the Initial D epo sit and the A ddi tion al D epo sit.

61. In re lian ce on the re p res ent atio ns m ade to th em , H ub ert T sa i and A ntho ny Tsai

entered into the ir P urch ase Ag reem en t.

62. [a reli anc e on the repr ese nta tion s m ad e to H ub ert Tsai, A nth ony T sai and her,

C hris tine Si n gh agr eed to pu rch ase A nth ony T sa i’ s in te re s t in his Pur cha se

A gree m en t.

63. In rel ia nc e on the repr ese n tat ion s m ade to Hu be rt Tsai, A nth on y Tsai and her,

C hris tine Singh ag reed to en ter into A ss ign m en t and As sum pti on of A gr eem en t

and to assum e A nt hon y Tsai ’s int ere st in his Pu rch ase A gr eem en t.

64. In re lian ce on the rep rese nta tion s m ade to H ub ert T sai , A nth on y T sa i an d her,

Christine S in g h paid to A nt hon y Tsai th e funds re pre sen ting her share o f the

Initial D epo sit an d A dd itio nal Dep osi t un der the Pur cha se Ag ree me nt she

assumed.

Th e F en g-M ec kel -Gr oss Pl ai n tif fs

65. Pla in ti ff Henry G ro ss is a New Y o rk resi den t w ith a busin ess a ddre ss o f 44 4

M adis on A ven ue,18h

Floor , New York, New Y ork 10022.

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66. Plai n tif f Randa ll A. Meckel is a New York res ide nt w ith an add res s of 3 1 0 East

46Street, #24A, New York, New Y ork 10017.

67. Pla inti ff Xue Feng is a New Y or k res iden t w ith an add res s o f 3 1 0 East 4 h Street.

#24A, New York, New York 10017.

68. Under a Pu rch ase Ag ree m en t da ted D ec emb er 14. 2007 . X ue Feng, R an dal l A.

Meckel an d H en ry G ros s con trac ted to Purc has e Hotel Suite Unit 2202 o f the

C ond om iniu m from the Sp on sor for a purch ase p ric e of $1 ,257 ,00 0.0 0 un der the

terms and cond itio ns thereof .

69. Xue Feng, R anda ll A. Meckel and Hen ry G ro ss subm itt ed an Initial De posit o f

$12 5.7 00.00 pay abl e to the Esc ro w A ge nt w ith its subm iss ion of the Pur cha se

Ag ree m ent to the Spon sor .

7 0 . Xue Feng, R anda ll A. M eck el and H en ry Gross su bm itte d an A ddit ion al De po sit

o f $1 25,7 00 .00 pay ab le to the Esc ro w Ag en t on or about th e day it was due, June

14 ,20 08.

71. On inf orm atio n and belief, the Escr ow Ag ent h old s a total D ep osit of

$24 8,8 00. 00, plu s acc rue d interest, in esc ro w for the ben efi t o f X ue Feng, R and all

A. Meckel an d He nry G ro ss un der the Escro w A gree m ent.

72 . In relia nce on the re pre sen tati ons m ade to them, X ue Fen g, Ra ndall A. M eck el

and H en ry G ros s a gr eed to purc hase a Unit of the Tr um p Soho.

73. In reliance on the rep rese nta tion s m ade to the m, X ue Fe ng, R an dal l A. M ec kel

and H enr y G ross de pos ited the funds us ed to m ake the In it ia l D eposit and the

A ddi tion al Depos it.

Co m pl ain t Page 1 5




74. In rel ianc e on the rep rese nta tion s m ade to them, X u e Feng, R an da ll A. Meckel

and H en ry G ro ss ente red into the Purc ha se A gre em ent.

Th e Be ave r M eta ls P la in ti ff s

75. Plain tiff Be ave r Metal, LLC (“B eav er Metal”) is a D el aw are lim ite d liabi li ty

co m pany w ith an ad dre ss of CI V ela zqu ez 60, 40, 28001 Madrid, Spain.

76 . Under a Pur cha se Ag ree m en t date d July 2, 2008, B eav er Metal con trac ted to

purchase Hotel S ui te Unit 3203 from the Sp on sor for a pur cha se pric e of

$1, 560 ,00 0.0 0 und er the terms and con diti ons th e re o f

77. Beaver Metal su bm itte d an Initial D ep o si t of $ 156,000.00 pa yab le to the Esc ro w

Agent wi th its su bm issi on of the Purc has e Ag ree me nt to the S p o ns o r.

78. Beaver Metal subm itt ed an Ad diti ona l D ep os it o f $1 56 ,000 .00 pa yab le to the

Escrow A gent on or abo u t the day it was due, Jan uar y 2, 2009.

79. On inf orm atio n an d be lie f the E scr o w Ag ent hold s a total D epo sit o f $3 12, 000 .00

in escrow for the be nef it of B eave r Metal un der th e Esc row A gr eem en t.

80. Pla int iff Acacio R od rig uez is a resid ent of S p a in wit h an addr ess of Cl Ve lazq ue z

60, 4°, 28001 M adrid , Spain.

81. Acacio R odr igu ez is the princ ipa l of Be ave r Metal and owns all o f its eq uity

me m bers hip in te re s ts .

82. N on-p arty Javi er R odr ig uez is an auth oriz ed rep res enta tiv e of Be ave r Metal.

83. Ja vie r Ro dri gue z co ndu cte d the inv esti gat ion of the pu rcha se o f the Trum p Soho

Unit o n beh alf of B eav er Metal and A ca ci o R od rigu ez .

Co mp lain t Page 16




$4. Javier R o d ri gu ez co mm un ica ted state m en ts and repr e se n tat ion s m ad e to him and

reviewed by him reg ard ing the Tru mp Soho, an d his a n al y se s and sum ma rie s

thereof, to B eav er Metal an d A caci o R od ri gu ez.

$5. In re lia nc e on the re pre sen tat ions m ad e to Jav ier R o dri gu ez and A c ac io

Rodriguez, A caci o R odr igu ez a gre ed to pur cha se a Unit o f the T ru m p So ho

through Be ave r Metal

$6. In re lian ce on the rep res e nta tio n s m ad e to Ja vi er R o dri gu ez and A cac io

Rodriguez, A caci o R o dr ig u e z con trib ute d the funds used to m ak e the In it ia l

Deposit and the A dd itio n al D ep os it to Be a ve r Metal.

87. In rel ia nc e on the re pr ese n tat ion s m ad e to Ja vi e r R o d rig u ez an d A cac io

Rodriguez. B eav e r Metal agr eed to p urc has e a Unit o f the T rum p Soho.

88. In re li an ce on the re pre sen tati ons m ad e to Jav ier R o dr ig uez and A c ac io

Rodriguez, B eav e r Metal de p os ited the funds used to m ak e the Initial D ep os it and

the Ad d iti o na l D epos it .

89. In re lia n ce on the repr ese ntat ion s m ad e to Ja v ie r Ro d ri g ue z and A caci o

Rodriguez, B eav er Metal en te re d into its P ur c ha se A gree m en t.

The C re d ib o x P lai n tif fs

90. P lai n tif f C red ibox U niv ers a l, SL (“C red ibox ”) is a S pa n is h com pa ny w ith an

address o f Ca lle A u re a D ia z Flores nümero 5 piso pn me ro of ic m a nü m e ro 8

T e ne rife .có d ig o p os tal 3 80 03 , Spain.

91. U nde r a P u rc h as e Ag ree m e n t da te d Au g us t 2, 2008, Cr edi b ox c o nt ra c te d to

p ur cha se Hotel S ui te U n it 3311 from the S po nso r for a pu rch ase p ri ce o f

Si .4 90 ,30 5 .0 0 un d er th e te rm s and con diti ons thereof.

C o mp lai n t Page 17




92. C red ibo x subm itte d an initial D epos it o f $74 ,51 5.2 5 pay abl e to the Escrow A ge nt

with its su bm issi on of the Pur cha se A gree me nt to the Sponsor.

93. C re di box subm itt ed a First A dd itio nal D epo sit of $74,5 15 .2 5 on or abo ut

De cem be r 4. 2008, as provi ded in its Pu rch ase A gre em en t.

94. C re dib ox su bm it te d a Second Ad diti ona l D epo sit of $149,0 30 .5 0 on or abou t

February 15, 2009 as prov id ed in its Pu rch ase A gr eem ent .

95. On info rm atio n and be liet the Escr ow A gen t hol ds a total D ep osi t o f $298 ,06 1.00

in esc ro w for the ben efit o f C red ib ox un de r the Escr ow A gre em ent.

96. Pl aint iff Felisa He rna nde z is a re si de nt of Spai n wi th an add res s o f C al le La

Pirra 14, Resid, Eis en howe r, BQ C, 5°C, Madrid. 28022 Spain.

97. Felisa H ern and ez is the sole own er and pr in cip al o f C redib ox.

98. Felisa H ern and ez cond uct ed the in ves tig atio n of th e pu rch ase o f the Trum p Soho

Unit on be hal f o f C red ibo x.

99. Felisa H erna nd ez comm un ica ted state m ents and re pre sent atio ns m ad e to her and

rev ie w ed by her rega rdi ng the Tru m p Soho, and he r an aly ses and su mm ari es

thereof, to Cr edi box .

100. In rel ia nce on the repr ese nta tion s m ad e to her, Fe lis a H ern and ez agre ed to

pur cha se a Unit of the Tru m p Soho thr oug h C red ibo x.

101. In re li an ce on the re pre sen tati ons m ad e to her, Feli sa He rna nde z co ntri but ed the

funds used to m ake th e Initial Deposit, the Firs t A dd itio nal D ep osi t an d the

Second A dd itio nal D ep osi t to Credibox.

Co mp lai n t Page 18




102. In relia nc e on th e rep res ent a tio ns m ade to F eli sa H em an dez , Cr e dib ox de pos ited

the funds used to m ake the In itial Deposit, the First A ddi tion al D epo sit a nd the

Second A d di tion al Deposit.

103. In re lian ce on the repr ese ntat ion s m ad e to Fe lis a H ern and ez, C re d ibo x en tere d

into its P u rc h as e A gr ee m e nt .

P u rc h as ing a nd Inv est ing P la in tiff s

104. As use d h ere in , the term “P urc has ing Pl a in tiffs ” re fe rs to all P la in ti ff s who have

entered into P u rc h as e A g re em en ts (i.e. all Pl ain tiffs e x ce p t Rachel G er st ei n , Jo y ce

G ers te in , He rbe rt G ers tein , A ca c io Ro d ri g ue z an d F el is a H e rna n de z ).

105. As u se d herein, the term “Inv est ing Pl a int iffs ” re fer s to all P la in ti ff s who have

co n tri b ut e d funds to b u si n es s e nti ti es for tho se e n tit ies to u se to make d ep o si ts

req u ir ed un der tho se entities’ Pu rch ase Ag ree m en ts (i.e. Rachel G ers te in , Joy ce

G ers te in , He rbe rt G ers tein , A caci o R o dr igu e z and Fe lisa H e rn an d ez) .

T HE DE FE ND AN TS

T he S po n so r D e fen da n ts

106. D ef en dan t B ayr ock /Sa pir O rga niz a tio n LLC (the “Sp o ns o r” ) is a D ela wa re

limited liab ilit y co mp any h av in g an add res s of 160 V ari c k Street,2 d

Floo r, N ew

York, N ew Y o rk 10013.

107. The S pon sor is the sp on sor of the T ru m p Soho H ot el Co ndo mi n ium New Y o rk

(the “ Co n do mi n ium ”) .

108. On Se ptem be r 21, 20 05 , the S p on sor acq u ire d an app rox im a tel y 24 ,72 7 sq u ar e

foot p ar ce l of lan d loc ate d at 246 Spring Street, Ne w York, N ew Y ork (th e

“Land”) up on w h ich the C o nd om iniu m was late r c o ns truc ted by the Sponsor.





109. D efe nda n t Donaki J. T rum p (“D on ald Tr u m p ”) is, on int h rm ati o n and belie f, an

individual and res ide n t o f New Y ork w it h an add res s o f do T he T rum p

O rg a niz atio n, LLC, 725 Fifth A ve nue , New York, New York 10022.

110. D efe n dan t Alex S apir is, o n inf o rm ati o n an d be Iief an in d iv idu a l and re sid ent of

New York with an ad dre ss o f d o T h e S ap ir O rga niz atio n, LLC, 384 Fifth

Avenue, New York, New York 10018.

I 1 1 . D efe nd an t T e vf ik A rif is, on inf o rm ati o n an d belief, an in di v idu a l an d re sid ent o f

New York w it h an a dd res s o f do B a yro ck G rou p LLC, 160 V an c k Street, 2’’

Floor, New York, New Y o rk 10013.

112. Donald Tr u m p, Alex S ap ir and T ev fik A r if are, on in fo rm atio n and belief, th e

indirec t ow ne rs o f the Sponsor. T h e basis for this a lleg atio n is a st a tem en t on

page 170 o f the O ff erin g Plan.

113. Defendant 246 S prin g Street H o ld in g s II, LLC (“2 4 6 Spring H o ldi n gs ” ) is, on

in fo rm atio n and belief, a De law are li m it e d liab ilit y c om pan y wi th an a d dr e ss of

16 0 V anc k Street, #2, New York, New Y or k 10013.

114. 246 S pr ing H old in g s is, on in form at ion an d b eli ef , the sole m emb er o f S pon sor .

115. D efen d an t B ay roc k /S a pir R ea lty LLC (“Ba yro ck/ Sap ir Re a lt y ”) is, on

in fo rm atio n and belief, a De law are lim ited li ab ilit y co mp any w ith an ad dre ss of

160 V aric k Stre et, #2, N ew York, N ew Y or k 10013.

116. Ba yro ck/ Sap ir R e alty is, on inf orm ati o n and b elie f, th e m an a gi n g m em ber o f 246

Holdings.

C om p la int Page 20




117. D etèn d a n t B a y ro ck S pri ng Street LLC (“B ay rock S pri ng” ) is, on in tbrm at ion and

belief, a D ela w are li m it ed li abi li ty co m pa ny wi th an ad d re ss o f 160 V ari ck Street ,

#2, New York, New Yo rk 10013.

118. Bay roc k S pr ing is on inf o rm ati o n and belief, the m an ag ing m em be r o f

B ayr oc k lS api r Realty.

119. Defenda nt B ay ro ck G ro up LLC (“B ayr ock G ro u p ”) is, on inf or m ati on an d belief,

a New Y o rk li m it ed lia b ili ty com pa ny w ith an add res s o f 160 V ari ck Street, #2,

New York, New Y o rk 10013.

120. Bayrock G ro u p , o n in fo rma tion and belief , is the sole m em be r o f Bay rock Spring.

121. The bas is for the all ega tion s reg ard ing the st a tu se s of 246 Spring H o ld in gs ,

Ba y ro c k/ S ap ir Rea lty, B ay ro ck Sp rin g and Ba y ro ck G ro u p as sole m em be r o r

man aging me mb e r of a not her c om pan y are sta tem en ts in the O ff er in g Plan an d

d o cu me n ts si g ne d on b eh a lf of those c om pa n ies in tho se re spe ctiv e c ap acit ie s,

including a sw o rn cer tifi cati on to the New Y ork D ep a rtm en t of Law a ttac hed as

Exhibit 1OA o f the O ffer ing Plan.

1 22. Jul iu s Sc h wa rz is, o n in form at io n and b e lie f , an ind ivi d ua l and re si d en t o f N e w

York wi th an a d dr es s of d o B ay roc k G ro u p LLC, 160 V ar ic k Street,2 d

Floor,

New York, New Yo rk 10013.

123. Jul ius S ch w ar z is, on in fo rma tion and b elie f, an E xe cut ive V ic e Pr e si d en t an d

Principa l of Ba y ro c k G ro up, and an au tho rize d sign ato ry of th e Sponso r. Th e

basis for this al leg atio n is do cum en ts ex e cu ted by Mr. Sch warz, in cl udi n g a sworn

ce rtif icat ion to th e N e w Y o rk D ep art m en t of Law a ttac h ed as Ex h ib it 1 O A o f the

O ffer i n g Plan.

C om pla int P ag e 21




124. Te v fik At-if is. on info rm a tio n and belief’, the fou n d er and C ha irm an o f’ the

[3ayrock G rou p . T he b as is for this inf o rm atio n is press rep o rt s rega rdi n g his title.

1 25 . Donald T ru m p , Alex Sapir, T evf ik A rif and Ju li us Sc h w arz are, on in lbrm at io n

and belief, “ off ice rs, dire cto rs, sh a reh old ers and pri nci pals of Sp on sor who are

ac ti ve ly in v o lv ed in the pl ann ing o r co nsu mm ati on o f’ the o ffe rin g co ntem pl ated

by the Plan.” T he bas is for this a lle g ati on is sta tem ent to this eff ec t on pa g e 170

of the Plan and a sw o rn c e rti fica tion to the New Y o rk D ep ar tm en t of Law

at ta che d as E x h ibi t IOA of the O ffe rin g Plan.

126. Dona ld T ru m p , Alex Sapir, T evt ik A rif and Ju li us Sc h w arz have, in a sw o rn

ce rtifi cat ion to the New York D ep a rt m e nt o f Law a tta c he d as E xh ibi t lOA o f the

O ff er in g Plan , cer tifie d that th ey ha v e read a n d in v es ti g ate d the facts in the

O ff erin g Plan, an d tha t the O ffer ing P lan (in clu din g an y a m en dm ent s to be

su b m it te d) is “c o m ple te , c ur re nt and acc u rat e,” do es not “ o m it an y m ate ri al fact,”

does not “ c on tain an y u nt ru e sta tem en t o f a m ate ri al fact,” and does “n ot co nt a in

any fraud , d ec e pti o n, con c ea lm ent, sup p re ssio n , [or] false pr e ten ce. ”

127. The B y -L aw s to the Co ndo min ium de sign ate D o n al d T rum p, A le x Sa pir an d

Julius S chw arz as the initial b oa rd of d ir ec to rs o f th e Co ndo mi n iu m , in ful l

control and ma nag em e nt o f the Co n do min ium , to serve as su ch until the

Co nd o mi niu m ’s firs t an nu al m eetin g , w hi ch ma y be held as late as on e ye ar and

30 days a fte r th e first c lo si ng o f a sale o f a Unit.

128. The B y- L aw s o f th e Co n do mi n ium pro v ide th a t the S p on sor w ill ha ve the

abs o lu te r ig h t to d esi gn a te a ma jori ty of the m em b e rs o f the b o ar d o f d ire c tor s o f

the Con do m in ium for a per io d end ing the la ter of five years from the d at e of th e

C om pla int Page 22




lirst c los in g o f a sa le o f a Unit or w h en the Sp ons or has sold an agg reg ate of 90%

of co mm on int ere st s in Co ndo mi niu m Units.

129. Even aft e r the ex pi rati o n o f the pe rio d w he n the Sp ons or has the abs o lu te rig h t to

d esi gna te a m ajo rity o f the m em b er s o f the bo a rd o f d irec tor s o f th e

C on dom in ium , the Sp o ns o r m ay still cont inu e to c o nt ro l the b oa rd of dir ect o rs of

the C ond om iniu m thr o ug h v o tin g its in te res ts in an y Units it owns .

T h e T rum p D e fe n da n ts

130. Defendant T rum p Int ern a tio n al H ote ls M an a ge m en t LLC (“ T ru m p H ot el s” ) is, on

in fo rm ation and belief, a D ela w are lim ite d lia bi li ty c om pan y w ith an ad dre ss of

725 Fifth A v enu e , New York, New Y or k 10022.

131. Trump H o te ls is d esi g na ted in the O ffer ing P la n (at 35) as the “ H o tel

M an ag em ent Co m p any ” w hic h w ill “act as the o per a tor and m an age r of th e hotel

in the C on dom in ium on be h al f of the Board p urs uan t to a Hotel M ana g em en t

A gre em ent, ” w ith ext en siv e resp ons ibil itie s d eta ile d in the Plan.

132. Trump H ot e ls is also the “Ho tel M an age r” u nde r a U n it M a n ag em e nt Ag ree me nt

(E xh ibit 13 to the Plan) that each U ni t bu ye r is requ ir ed to s ig n upo n pu rch ase o f

the Unit, wit h ex ten sive resp ons ibi litie s d eta ile d in the Plan.

133. D ef end ant Tr u m p M ark s Soho LLC (“ T ru m p M ark s”) is, on in for m at ion an d

belief , a N ew Y or k lim ite d liabi lity co m pa ny w ith an add re ss o f 725 F if th

Avenue, N ew York, N ew Y o rk 10022.

134. T rum p M arks is the o wn er o f ce rtai n tr ad em ark s , inc lud ing “T ru m p Soho Hotel

C on do m in ium New Y o rk ,” “T ru m p Soho Hotel Co n do min ium ,” “T rum p Soho

Hotel” and an y ot her c om b in a tio n o f “T ru m p ” w ith “Soho”, and th e L ice nso r o f





such tr ade m a rk s to the S po n so r p urs uan t to a S po n so r L ic en se A gre em ent

des crib ed on page 19 of the Plan, and to the Co nd o mi niu m un der a Con do m in ium

License Ag reem en t (Ex hib it 1 6 to the Plan).

135. D ef end ant Donald T rum p Jr. is, on in for m ati on an d belief, an in d iv id u al an d

resident o f New Y o rk w it h an ad dr es s o f do The T ru m p Or gan izat ion , LLC, 725

Fifth A v en u e, New York, New York 10022.

136. D efe nd an t Iva n ka T rum p is, on in fo rm a tio n and b el ie f, an in div idu a l an d resid ent

of New York w ith an ad d re ss o f d o The T ru m p O rga niz a tio n, LLC, 725 Fifth

Avenue, New York, New Y or k 10022.

137. D efe n da n t Eric T rum p is, on in fo rm a tio n and be li ef , an in di v id ual and re s ide nt of

New York w it h an ad dre ss o f d o T he T ru m p Or gan iza tion , LLC, 725 Fifth

Avenue, New York, N ew Y or k 10022.

138. On in fo rma tion an d b elie f, D on ald T ru m p , D ona ld T ru m p Jr. , Iva n ka T ru m p and

Eric T rum p have an 18% int e res t in the T rum p Soho. T h e b as is fo r th is a lleg ati o n

is a Wall St ree t J o ur n al arti cle da ted M ar ch 29, 20 1 0 and a Wall S tre et J our nal

art i c le d at ed Ju ly 30, 20 10 that state that each h av e an 18% in ter est in the T ru m p

Soho, and are each in div idu al si gn a to ri e s to the e xc lusi v ity pro vis ion s o f a lic en se

agr eem en t for the us e of T ru m p T ra de m arks , atta che d as E x hib it 1 6 to th e

O ffe ri ng Plan.

139. On inf o rm ati o n an d be1 ief D o na ld Trump, D on ald T rum p Jr., Iv ank a T ru m p and

Eric Tru mp are o ff ic er s, di re ct o rs , sh a re h ol de rs, m em b ers , m a na g ers an d/o r

p ri nc ipa ls o f T ru m p H ot e ls , T ru m p Marks an d the S po nso r. T he ba sis for thi s





in tbrm ati on and b eli e f are pre ss rep ort s re g ar d ing th e ir ex ten s ive in vol v em en t and

control ove r m ult iple asp ects o f th e T rum p Soho project.

140. On inf o rm a ti on and belief , T ru m p H ot e ls has si g ni fica n t in flue nce and con tro l

o v er the ma nag em ent an d op era tion s o f the S pon sor and the Tr u mp Soho. T he

basis of su ch in fo rma tion and be lief is the co mm on o w n ers hi p, m a na g em en t an d

control b e tw een T ru m p H ot e ls and the S po nso r, b ec aus e of its d esig na tion as

Hotel Ma nag em ent C om pa n y an d Hotel M an ag er in the Plan and th e a g ree me nts

ref ere n ce d t he rei n, and b ec aus e of its ext ens ive re spo nsi bili ties for ma nag em ent

and o pe rat io n of th e T ru m p Soho d eta ile d in the Plan.

141. On in form at ion and belief, T ru m p Marks has si g ni fica n t in flu enc e an d co ntr ol

o v er the m ana gem en t and op erat ion s o f the S po n so r and the T ru mp Soho. T h e

bas is o f such in for m a tion and b eli ef is the c om mo n o wn ers h ip , ma na g em ent and

control b etw ee n T ru m p Marks an d the Sponsor; a n d beca u se o f its o w n ersh ip and

licensing o f tr ade ma rks cri tic a l to the ope rat ion an d ma rke tin g of th e T ru m p Soho

un d er the P lan and in ag ree me nts re fere nce d th ere in .

Th e P rod igy D ef e nd a nt s

142. D efe nd an t Pr o dig y In tern ati o na l NYC, LLC (“P ro di gy ”) is a D e la w ar e lim ited

lia b il it y c om pan y w it h an add re ss o f 72 G ree ne Street, 2 ’ Floor , N ew York, N ew

York 10012.

143. Until app rox im a tel y July 2008, P ro d igy w as d es ign a ted b y the Sp on sor as th e co

ex clu si ve se ll in g ag en t for the T rum p Soho.

144. A fte r app rox ima tely Ju ly 2008, P rod igy wa s the ex c lus ive selling a ge n t fo r th e

Trump Soho.





145. At all re le v an t tim es , P ro d igy was, on in fo rma tio n and belief, re spo nsib le on an

exc lu si v e o r c o-e xcl usiv e ba sis for se llin g Units o f the Tr u m p Soho o n b e ha lf o f

the S po nso r and for m arke ti ng the Tr u m p S oh o ’s rental m an age me nt p rog ram on

be h alf of T ru m p Hotels. T he basis for this alle gat ion is st a tem en ts in the O ffe ring

Plan, incl udi n g on pag e 172 the reo f

146. By rea son of its sta t u s as e x cl u siv e and c o-e xcl u siv e sa les ag e nt for th e Tr u m p

Soho, P ro d ig y has, on inf o rm a ti o n an d belief, a sub sta n tia l fin anc ia l st ak e in each

Unit of the T ru m p Soho sold.

147. D ef en d ant Rodr igo Nino is an in d iv idu a l and re s ide nt o f New Y or k w ith an

ad dress of I M or to n Square, #6 F W , N ew York, New York 10014.

148. Rodrigo Nino is, on in for m at ion and belief, the fo un der and P re side nt o f P rod igy ,

as well as the pr inc ipal o ffi cer o f Pr o di g y res p on sib le for the sales an d m ar keti ng

o f the T ru m p Soho. The basis for th is all e ga tion in m u lti p le sta tem en ts re po rted

in the p re ss an d on the T rum p Soho website.

149. By re a so n o f his status as fou nde r, Pr esid en t an d p rin c ip a l o ff icer res p on sibl e for

the T ru m p Soho for Pr o di gy, R od rig o Nino has, o n info rm a tio n an d b el i e f, a

su b st an tial pe rso n al financial st ak e in each U nit of the T rum p Soho sold.

T he C o re D e fen d a n ts

150. D ef end ant C o re G rou p M ark eti n g, LLC (“ C o re ”) is a New Yo rk lim ited liab ility

co m pa n y w it h an a d dr es s of 417 F if th A v en ue ,9 h

Floor, N ew York, N ew Y o rk

[0016.

151. Until a ppr o xim at ely July 2008, C o re w as d esig na ted by th e Spo ns o r as the c o

ex clu si ve se ll in g ag en t for the Tr um p Soho.





I 52. At all re le va n t times, C o re was, on in for m ation and b eii e f re sp o ns ible on a c o

ex clu si ve basis for se lli n g Units o f the T ru m p Soho on b eh a lf o f the Sp ons or and

lbr m ark eti ng the T rum p S o ho ’s rental m a na g em en t p rog ram on b eh a lf o f T rum p

Hotels. The basis for this all e ga tion is s tat e m e nts in the O ffer ing Plan, in c lud ing

on p age 172 thereof .

153. By rea so n o f its s ta tu s as c o -ex clu siv e sales age n t for the T ru m p Soho until

ap p ro x im a te ly Jul y 2008 , Co re had , on info rm a tio n and belief, a sub stan tia l

financial s ta k e in each U nit of th e T rum p S oh o sold.

154. On in for m at ion an d be lief D efe n da n t S h aun O sh er is an ind ivi d ua l a nd r esid ent of

New York with an ad d re ss at 41 7 Fifth A v enu e ,9 h

Floor, New York, New Y o rk

10016.

155. Shaun O she r is, on inf orm ati o n and belief, the fo und e r and C hi ef E xec uti v e

O ffic er o f Core, as well as a p rin c ip a l o ffic er o f C or e re spo nsi ble for the sal es and

m ar ke tin g of the T rum p Soho. T h e ba sis for this a lle gat ion in m u ltip le sta tem e nt s

rep ort ed in the p re ss and on th e T rum p Soho w ebs it e.

156. By re aso n o f his sta tus as founder, C hie f E x ecu ti ve Off icer an d pr inci p al of fice r

re sp o n si bl e for the T ru m p Soho for Core, S hau n O she r has, on in for ma tion and

be lief, a su bs ta n ti al p e rs o na l fi na nci a l stake in eac h U n it of the T rum p Soho sold.

157. On in fo rma tio n an d bel ief , D efend an t T h o m as P os tili o is an ind ivi d ua l and a

resident o f N ew Y ork w ith an add res s of 417 Fifth A v en u e, Floor , New York,

New Y ork 10016.

158. Th o m a s P o sti li o is, o n in fo rma tio n and belief, a fo un d in g me mb er an d M ana g in g

D ir ec tor o f Core, as well as a p rin c ip a l o ffi c er o f C ore resp ons ibl e fo r the sales

Com pl ain t Page 27




and m ar k et in g of the T ru m p Soho. T h e ba sis for thi s a lle g ati o n is T hom as

Postilio’s p o sit ion at Core.

159. By re aso n o f his s ta tu s as a fo und ing m emb er, M an ag in g D irec tor and pri nc ipa l

of fi ce r resp on sibl e for the Tr u m p Soho for C o re , Tho ma s P o st il io has, on

in fo rm at io n and belief , a su bs ta n ti al pe rs on al fi nan c ial stake in each Unit o f the

Trump Soho sold.

T he E scr ow A ge n t

160. D efe n da n t A ke rma n S en te rf itt, LLP (th e “ Es c ro w A ge nt” ) is a New Y ork limited

liability par tne rshi p wi th an ad d re ss o f 335 M ad iso n A ven ue , New York, New

York 10017.

161. The E sc row Ag ent is the escr ow age n t for pu rch ase rs of Units at the T ru m p Soho

u nd er a E scr ow A gr e em en t a ttac h ed as E xh ibi t 9 to the O ffe ri n g Plan.

162. The E scro w Ag ent is bein g sued o n ly in its cap aci ty as E sc ro w A g e n t.

M isre pre sen ting an d C o nt rol D e fe n da n ts

163. As used herein, th e ter m “M isre pre sen ting D efe nd an ts” refe rs to th e S po ns or,

Donald T ru m p , Ju lius S ch w ar z, T rump Hotels, Tru mp Marks, D on ald Tr u m p Jr.,

Ivanka T ru m p , Pr o di gy, Ro dri go Nino, Core, S haun O sh er an d T ho m as P os tili o .

164. As used herein, th e ter m “Co n tr o l D e fen d an ts” refe rs to all D efe nda nts ot her tha n

the Sp o n so r and the Es cro w Agent.

165. Each of the C o nt rol De fen dan ts dir ect ly o r in dire ctl y had the p ow er and in fl u en ce,

to control the de cis ion- ma kin g o f S pon sor , and d id inf lu en ce and co n tro l the

de cis ion -ma kin g o f S po n so r, w ith res p ec t to th e acts and o mis sio n s and co u rs e of

conduct a lleg ed h ere in , in c lu d in g the dis sem ina tion o f all false and mi slea din g





s tat e m en ts de scri b ed herein, an d cu lpa b ly p art icip ate d in su ch ac ts and om iss ion s

and co u rs e o f co nd u ct, an d had the op po rtun ity to p rev en t, bu t failed to p rev e nt,

such ac ts and om issi o ns an d co u rs e o f co n du c t by rea so n of the following:

a. 246 S p ri ng H oldin g s , by reas o n o f its be in g the so le m em be r o f Sponso r.

b. Ba yro c k/ S ap ir Realty, by re as on of its b ei ng the m an a gin g me mb er o f 246

Spring H old ing s , the sole m em b er o f S p on sor .

c. B ay roc k Sp rin g , by rea so n o f its be ing th e m an ag ing me mb e r o f

Ba y ro c k/ S ap ir Realty, the m an a gi n g me m b e r o f 246 Sp rin g H o ld in g s, the

sole m e mb er o f Sponsor.

d. B ay ro ck G ro u p , by re aso n o f its b ein g the sole me m be r of B ay roc k

Spring, the m ana g in g m em b er of B ay roc k lS apir Realty, th e m an a g in g

m e m b er o f 246 S p ri n g H o ld in gs, the sole m em ber o f Sponsor .

e. Donald T rum p , b y reas o n o f his b ei n g o n e o f the th re e ind irec t o w n er s o f

the Spo nso r; his bein g on e of the “of fi ce rs , d ire c tor s, sh are h ol der s and

p rin c ip a ls o f S p on so r who are ac tiv e ly invo lve d in the plan nin g or

co n su m m atio n of the o ff er in g co nte mp late d b y the Plan”; his h av in g

su bm itt ed a sw orn ce rtif icat ion to the N e w Yo rk D epa rtm en t o f Law

re ga rdin g the a cc u ra cy o f the S p o ns or’s repr ese n ta tion s; and his h av ing

been d esig nat ed a m em b er of the initial Bo ard of D ire c tor s o f th e

Co ndo mi n iu m ; and his being an offi cer , d ir ect o r, sh ar eho ld e r, andJo r

pr inc ip a l o f T rum p H otel s, T ru m p M ark s a nd the S p on sor .

f. Alex Sapir, by reas o n o f his being one o f the th re e in d ire c t ow ner s o f th e

Spo nsor; his b eing one of the “of fice rs, d ire c to rs , sh areh old ers and





p rin cip als o f S po n so r wh o are act ive ly inv o lv ed in the p lan n in g o r

con sum ma tio n o f the o ff erin g co nte mp late d by the Plan”; his hav ing

su bm itte d a sworn cer tifi c ati on to the New Y or k D e pa rtm e nt o f Law

reg ard in g the a ccu rac y o f the S p o n so r’ s repr e sen tat ion s; and his ha v in g

been de sign ate d a me mb e r of the initial B oa rd of D ire c to rs of the

Co n do min ium .

g. Tev fik Arif , by reas o n o f his being one of the thre e in dir e ct o wn ers of the

Spons or; his be ing on e of the “ o ffi cer s , d ire ct or s, shar eho lde rs and

pr in ci p al s o f S po n so r who are ac tiv ely in v o lv ed in the p lan nin g o r

con sum ma tio n of the o ff eri ng con tem pla ted by the Plan”; his ha v in g

sub m it ted a sw or n cer tific atio n to the N ew Y o rk D epa rtm ent o f Law

reg a rd ing the a c cu racy of the S p on sor ’s re p re sen tatio ns; and his be in g

foun d er and C ha irm an o f the B ay ro c k G rou p , the sole m em be r o f B ayr o ck

S p ri n g, the m an ag ing me mb e r of B ayr ock lSa pir R ea lt y, th e m an ag ing

m em b er o f 246 Sp rin g H old in g s, the so le me mb er o f Sp on so r.

h. Ju liu s S chw ar z, b y reas o n of his b e in g o ne o f the “of fi ce rs, di rect ors ,

shar eho lde rs an d pri n ci p als of S po n so r who are act ive ly in vo lve d in the

p la n ni n g or c ons um m at ion o f the o ffer ing co nte m p late d b y t he Plan”; his

bei ng an auth ori zed sig n ato ry o f th e S p on sor ; his ha v in g su b m it te d a

sw or n c e rtif ica tion to the N e w Y o rk D ep art me n t o f Law re g ar d in g the

a ccu rac y o f th e Sp o n so r’ s rep rese nta tion s; and his b ein g E xe cuti v e V ice

P re s id en t and P rinc ipa l o f th e Ba yro ck G ro u p , the sole m em be r o f

C o m p lai n t Pag e 30




Bayrock S p rin g , the m an agi n g me mb er o f Ba yro ck/ S ap ir Realty, the

m an agi ng m em b er of 246 S pri ng H o ld ing s , the so le m em be r of S po n so r.

i. Tr um p Hotels, by re aso n o f th e c om mo n ow ne rsh ip, m ana gem en t and

control b etw een T ru m p H o te ls a nd the Sponsor; its de sign atio n as Hotel

M an age m e nt Com pa ny a nd Hotel M a n ag er in the Plan and the a g re e me nts

refe re nc ed th ere in ; an d its e x ten siv e resp ons ibil itie s for ma nag em ent and

op e ra ti on o f the T rum p Soho d eta ile d in the Plan.

j. T rum p M ark s , by rea so n o f the c om m o n o w n ers hip , ma nag em ent and

c o nt ro l b etw een Tr u m p Marks and the Sponsor ; and its ow ner shi p an d

lic ens ing o f trad em a rk s criti cal to the o pe rati o n an d m a rk eti ng of the

T ru m p Soho u nd e r the P lan and in ag ree me n ts re fere nce d the rein .

k. Donald T rum p Jr., Ivanka T ru m p and Eric T ru m p, by rea son o f the ir

o w n er sh ip in te re st in the T ru m p Soho; an d th eir b e ing o ff ic er s , d ire c to rs ,

sh a re h ol de rs , m em ber s, ma n ag e rs an d /o r p rin cip als o f T ru m p H o tels ,

T ru m p M arks and the S po nso r.

Prodigy, b y rea son o f its being resp on sibl e on an e xcl u siv e o r c o-e x clu siv e

ba si s for se lli n g Units o f the T ru m p Soho on be h al f of the Spo nso r and for

m ar k et in g th e T ru m p S oho ’s ren tal m a na g em ent p ro g ra m on be h al f o f

Tru mp Hotels.

m. R od rig o Nino, by reas o n o f his be in g the fo u nd er and Pre sid e nt of

Pr odi g y; and the p rin cip a l off icer of P rod igy r esp ons ible for the sales an d

m ar k eti n g o f the T ru m p Soho.

C om pla int Pag e 3 1




n. Core, by rea son of its be ing res po n sib le on a co -ex c lus ive basis for sell in g

Units o f the T rum p Soho on be hal f of the S pon sor and for ma rke tin g the

T rum p S oho ’s rental m an ag e me nt pro gra m on be h al f of T rum p Hotels.

o. S h au n O sh er , by re a so n o f his being the fou n d er an d C hi ef Ex ecu tiv e

O ffi c er o f Core, an d a p rin c ipa l o ffi c er o f C o re resp on sibl e for the sales

and m ar k et in g o f the T ru m p Soho.

p. T h om as P osti li o, by rea son o f his b ei n g a foun d in g m em be r an d M an agi ng

D ire ct o r o f C ore , and a p ri n ci p al o ffic e r o f C o re re spo nsi b le for th e sales

and m ar k et in g of the T rum p So ho.

O th er N o n-P art y T rum p S o ho R ep res e nt a tiv e s

166. In ad dit ion to the D e fe n da n ts n am ed above, the fo ll o w in g ind ivi du a ls an d en tit ie s

(the “No n-P art y T rum p Soho R ep res enta tiv e s”) h av e acted as rep rese nta tive s an d

agents o f the T ru mp Soho in the ca pac itie s in d ic at ed.

167. Sara Cl eph ane was fo rm erly D ire cto r o f Sa les for th e Tr u m p Soho. On

in for m ati on and be li e f, she is a lice n se d real es ta te b ro k er or sal esp erso n and w as

an em p loy ee or sales agen t of Pro dig y d eta iled to wo rk on b eha lf of the Tr u m p

Soho.

168. Sandra D o m in g u ez was fo rm erly a sa les a sso cia te fo r the Tr u m p Soho. O n

in fo rm atio n and belief, she is a li ce n se d real est a te sa les p ers on and was an

e m p loy ee or sal es ag en t o f P rod igy d et a ile d to w o rk on b eh a lf o f the Tr u m p Soho.

169. Amy W ill iam son is the D irec tor of R en tal P rog ram s for the T rum p Soho. O n

in fo rm ati on an d belief, she is a li ce n se d real est at e sa lesp ers o n and was an

em ploy ee or sa les ag en t o f P rod igy d et a ile d to w or k on be h al f o f the Tru mp Soho.

Co mp lai n t Page 32




170. Marcella C arr illo is o r w as a sales as soc iate tb r the T ru m p Soho. On in tbr m at ion

and b eI ie t she is a lic en sed real est at e br o ke r or sa les p er son an d is cu rren tly an

em p lo y e e o r sa le s a g en t o f P rod ig y who is or was de tail e d to w or k on b eh a lf o f

the T ru m p Soho.

171. Marcel Ia Reyes for m er ly was a sal es ass oci a te for the T rum p Soho. On

in fo rm atio n and b el ie t sh e was is a lic ense d real est at e b rok er or s ale spe rson and

an emp loy e e o r sales age nt o f Pr o dig y d eta iled to w or k on b eh a lf of the T ru mp

Soho.

172. Ruedi S ie b er is or was a sales a sso cia te for the T rum p Soho. O n info rm atio n an d

belief, he is a li cen sed re al e s tat e b ro k er or sale spe rso n and is cu rre n tly an

em plo y ee or sales ag en t of Pr o dig y who is o r w as d eta iled to w or k on be h al f of

Trump Soho.

173. Baobab 3i (“ Ba o bab ”) is a S pa n is h c om pan y w it h an address o f C /Ag usti n De

Foxa N° 2 5 12°A, 28036 Madrid, Spain.

174. At all rel e va n t times, Baobab was, on in for m ation an d belief, an auth o riz ed

selling ag e nt o f the Sp o ns or in S pain and r esp o ns ible for se ll in g U ni ts o f the

Trump Soho on b eh a lf of the S po n so r and for m a rke tin g the T ru m p Soho’s re n tal

m an ag em e n t p ro gr am on be h al f o f T ru m p H o te ls in Spain. The ba si s f or thi s

al le ga ti o n is th at Baobab ac te d as a selling a ge n t an d was iss u ed a T rum p Soho

bu sin ess card an d pr o vi d ed w ith a T ru m p Soho sales office ad dre ss in New York.

175. Ferran F on tal is, on inf o rm ati o n an d be lief, C hai rma n and C h ie f E x ec u tiv e

O ffi cer o f B aob ab , as w ell as the pr in c ip a l o ffic e r o f Baobab re sp o ns ible for the

sales and m ark eti ng o f the T ru m p Soho. D ef end ant F err an Fo nta l acted as a





selling agent of the T ru m p Soho and was is su ed a T rump Soho b u sin ess card by

the S po n so r and was pr o vi de d with a T ru m p Soho sales oft ice add res s in New

York.

176. Javi er C e rr o Diaz is o r was the In tern ati o na l Sales M ana g er for Baobab. On

inf o rm ati on an d belief , he is o r was an em plo y ee o r sales ag en t of Baoba b

de ta iled to work on be h alf o f the T ru m p Soho.

177. Upon in fo rm at io n and belief, each o f the a bov e-n am ed N on -Pa rty T ru m p S o ho

R e pr ese nt at iv es was p ri vy to “ ins ide” in fo rm at io n of the Sp on so r, p ro v id ed to

them eith er by the Spo nso r and /or o the r D efen d a n ts, con ce rnin g (a) the n um be r o f

actual po ten ti al buye rs on the T ru m p Soho w aiti n g list at an y g iv en time, (b) the

nu m ber and p er c en tage o f T rum p So ho Units th at w ere ac tua lly sold or u nd er a

pu rch ase agre em ent to p ur cha ser s at an y given time, an d (c) the o ve rall pro gre ss

o f the m a rke ti ng and sales o f Tr u m p Soh o Units for p u rpo ses o f the S po n so r

being abl e decla re the P lan effec tiv e and /or for pur pos es of the S po n so r be in g

able to h o ld c lo sing s wit h in the ti m e sp ec if ie d in the Plan.

178. U po n in fo rm a tio n an d be lief, each of th e a bo v e-n am ed N o n -P arty T ru m p S o ho

R e pr ese n tat iv es were au tho riz e d by the S po nso r an d /or oth e r D ef en da nts to

market T rum p Soho Units to po te n ti al b uy ers by u se o f sta tem en ts th a t ref erre d to

the nu mb er o f b u ye rs on the Tr um p Soho w aiti n g list a nd/ o r to th e nu m b er or

perc en ta g e o f sales alr ead y m ad e ov e ral l o r in spe c if ic h ote l uni t “ lin es. ”

179. Upon inf or m a tio n and be lief, the st at e m en ts m ad e by each o f the No n-P arty

Trump Soho R ep re sen tat iv es to po te n ti al buy ers , co nc ern in g the nu mb er o f

bu yers on th e T rum p Soho w ai ti ng lis t a nd/ or the num be r and p er cen tage o f sales





al re ad y m ad e ove ral l o r in sp ecit ic hotel un it “ lin es,” w er e m ade ei ther (a) at the

express dir e cti o n or agr e em e nt o t or (b) w ith the k n o wl e dg e , a pp rov a l, o r

ac q u ies c en ce of the Spo nso r and lor o ne or m o re o f th e oth er D ef end a nt s .

IS O . Upon inf orm ati o n and belief, ne ith e r the S po n so r no r a n y of the o the r D efe n da n ts

ever adv ise d an y o f the N o n- P ar ty T ru m p Soho R epre sen tati ves that an y

st a tem en t m ad e to a p ote nti a l buyer, co nc e rni ng th e num be r o f buyers o n the

Trump Soho w ai ti ng list an d/o r the nu m be r o r pe rcen tag e o f sale s alre ady m ade

overall o r in sp ec if ic hotel u ni t “ li ne s ,” was ei the r ina c cu rate or false; n o r w as an y

one of th e N on- Par ty T rum p Soho re pr esen tat ive s ev er d ire cte d to ce a se an d

des is t fr om m ak ing ina c cu rate or fa ls e st a te m en ts c on c er n in g the w ait ing list or

the nu m be r o f sales ; n or wa s any one o f them eve r re prim an ded o r his or he r

serv ice s ter m in ate d for d oin g so.

181. Upon info rm a tio n an d be lie f, each of the N on- P ar ty T rum p Soho R ep res e nt a tiv es

had suf fici ent k n ow led ge o f the wa itin g lis t and/or the nu mb er o f sa le s afr ea dy

made a t an y g ive n time, th ro u gh his or h er o w n effo rt s, to k now o r det e rm ine the

true facts con cer nin g (a) th e w ait in g list and sal es nu m b ers pr ovi d ed to them by

eit he r the S p on sor an d/o r b y a n y o f the oth er D ef end ant s, (b) o r the w ait in g list

and sa le s n u m b er s each of them re pr ese n ted in s tat eme nts m a de to p ote nti a l

buyers.

182. Upon in form ati on and b eli e f the co mp e nsa tio n to be rec e ive d by ea c h o fthe N on

Party Trump Soho R e pre sen tat ives was dire ctl y rel a te d to th e n u m b er of actual

sales de term ine d to be at trib u tab le to th eir ind ivi d ua l ser v ice s , and, th e re for e , each

N o n- P ar ty T ru mp Soho R ep rese nta tive had a pe rso n al fi na n ci a l inte res t in





m ar ket i n g and p ro m o ting th e s a le of’ Tr u m p Soho hotel Units to p ote nt ia l b u ye rs

by ma kin g state me n ts that in fla te d the n u m b er s on the w ait ing lis t and the n um ber

of sales alr ead y made.

JU RI SD ICT IO N AND V E N U E

183. Ju ris dic tion is p rop er in this Co u rt u n de r bo th 28 U.S.C. § 1331, the g en er al

federal q ue stio n ju ris d ic tion statute, and 15 U.S.C . § 1719, the pro vis ion o f ILSA

g ra n ti ng U.S. District C ou rts ju ris d ic ti on o ve r ac ti o ns to enf o rc e ELSA’s

prov isions.

184. Ju ris dic tion is p rop er in this Co u rt as to the cla ims not ar is in g un d er fe d er a l law

p ur su an t to this C ou rt’ s su pp lem en tal ju ris d ic tion und er 28 u . sc . § 1367.

1 85. Venue is pr ope r in this D ist r ict u nd er b o th 28 U.S.C. § 1391, the g ene ra l v enu e

statute, and 15 U.S.C. § 1719, ILSA’s ve n ue pro vis ion, in that many of the

Defen dan ts res id e and may be found in this D ist ri ct , and the C o nd om iniu m an d

the Units a t issue are loc a ted in this D is tr ic t, the U n it s were o ffe red fo r sa le in this

District, the Pu rch ase A gre em ent s at issue w er e entered into in this D is tr ic t, and a

subs ta n ti al part o f the eve n ts , m isr e pre sen tati ons an d om iss ion s at issue her e

o cc u rr ed in this D ist ri ct .

186. The D ef end ant s , d ire c tly an d in d ire c tly , have m ade use o f the m ea n s and

in stru m en ta li tie s o f int e rs ta te and int ern at io n al co m m er ce, the m ean s an d

ins tru m en ts o f tra nsp ort a tio n and co mm un icat ion in int e rst a te and in ter n ati ona l

co mm er ce, inc lud in g the mails, the internet , e le ct ro n ic mails , inte rsta te and

in ter n at io na l c ou rie rs and the te le ph o n es, in con nec tion w ith the acts and

pract ices , an d co urs e s o f b usi n es s set forth in this Co m plai n t.





TH E T RU M P SO l- lO D E V E L O P M E N T

T he M ark etin g o f th e T rum p Soho

[87. The T rum p Soho w as an nou nce d du rin g the fifth se aso n o f Donald Tru mp ’s

rea lity TV show “The Ap pren tic e” in 2006.

188. The T ru m p Soho was ini tial ly ma rke ted as a 46- sto ry glass tower, $3,0 00- a-

squ are -tbo t co ndo -ho tel th at was sc hed ule d to op en in the Spring o f 2009.

189. The Tru m p Soho was go in g to be the first new fi ve- star ho tel dow nto wn sin ce the

Ritz C an to n and the first on e eve r in Soho.

190. The in te rior of the Tr um p Soh o was des ign ed by David R ockwe ll, an d it fea tures

Fendi C as a fur n itu re and cus tom -m ade bed din g by Bellino.

[91. The adve rtis eme nts (‘or the Tr um p Soho have been des cri bed as feat urin g “I van ka

[Trump] el ega ntly fa ll in g ou t of a co ckt ail dre ss, ” an d hav e the tag line “P osse ss

Y o u r O w n Soho.”

192. While the T rum p Soho was unde r co nstr uct ion , the D ef end ant s cond uc ted the ir

m ark et in g out o f a sales of fi ce l o ca te d at 102 W oos ter Street, N ew York, New

York, 10020.

193. In co nduc ting th eir ma rke ting o f th e T rum p Soho, th e D efe nd an ts es tabl ishe d a

website, h ttp: //w w w .tru mp soh o.c om! , wh ich was av aila ble to po ten tial bu y er s

w or ldw ide .

194. On in form at ion and be lie f the D efe nd ants ma rke ted and prom ot ed the ir

h ttp ://w ww .tm mp soh o.c om w eb site t hro ugh p ai d , spo nso red adv erti sing links on

Gmail an d oth er G oo gle w eb site s . T he bas is for this info rm atio n and bel ief is a

Febru ar y 6, 2008 ar ticl e in Cu rbe d NY.





195. In c o nd u ct ing th ei r m ark etin g o f the T ru m p Soho, the D ef end a nt s p ub lish ed

ad ver tise me n ts in m aga zin es, ne w sp a p er s and oth er pu b lic atio ns of in ter s tat e and

interna tional dis trib utio n.

196. In co n du ctin g the ir m a rket ing o f the T rum p Soho, the D efe n d an ts sent sa les

agents on int e rn a tio n al trip s to m a rk et the T ru m p Soh o, in c lu d in g but not lim ite d

to trips to S pa in and Korea.

197. In co n du c tin g the ir ma rke ting of the Tr u m p Soho, the D efe n da n ts used the mails ,

the te le p h on e , the int e rn e t, e -ma ils , int e rst a te a ir co urie r ser vi c e, and in ter n ati ona l

ai r co uri er se rv ice s, am on g oth e r m ean s of in ters tate and in tern ati o na l

co m m u ni c ati o n.

198. The D ef end ant s m ar k ete d the Units to the general p ub lic in a pu b li c o ffe rin g .

199. The Plan sta te s (at p ag e 30) that: “Th e re ar e no lim ita ti on s on who ma y pu rcha se

the o ffe red Units .”

T h e O ff e rin g P la n a n d D ocu me nts

2 00 . On A ug us t 3, 2 00 7 , the o ffic e o f the N ew Y ork At torn ey Ge ner a l (t h e” Att orn ey

G e n er a l”) acce pte d fo r f il in g an o ff er ing p lan fo r the T ru m p S oh o p rom ulg ate d b y

the Sp o ns o r.

2 0 1. U nd er th e M art in A ct, the A ttor n ey Ge n er a l’s acc ept anc e o f the P la n fo r f ilin g is a

lega l pr ere q uis ite to th e o ffer ing o f th e U n it s for sale.

2 02 . The O ff erin g P la n set fo rt h th e te rm s a n d cond itio ns un d er w hic h th e S pon sor w as

to se ll th e Units.

203. The P lan st at ed o n its cov e r th at 413 Ho te l S uite U n it s o f the T rum p Soho w ere

offered for sale.

C om p la int Pa ge 38




204. Th e c ove r of the Plan also no ted that “T he Co nd om iniu m has 413 Hotel S u ite

Units and 7 C o m m er cia l Units. The C om me rcia l Units are not bein g off e re d for

sale h er e un d er at this time.”

205. In the sec tion o f the Pl an’ s In tr o du c tio n en titl e d “O ffe rin g of Units for Sa le” , the

Plan (at p age 30) states: “S pon sor h ere b y of fer s the 413 Hotel Su ite Units for sale

un der th e P lan .”

206. The “O ffe ring o f U n it s for Sale” se c tio n o f the Pl an go es on to state (at pa ge 31):

“Sp ons or w il l end ea v or in good faith to se ll.. . the Hotel Su ite Units o ffer ed

h ere u nd e r.”

207. N ow h ere in the Plan, or any o f the o the r of feri n g do c um en ts, does the Sp o ns o r

state — or ev en su g ge s t — that any of the Units are exc lud ed from o r held ba c k

from the offe rin g .

208. N o w he re in th e Plan, or any of the o the r o ffe ring d o cu m en ts, does th e Sp ons or

state — o r ev en sug ge s t — that the o ff e rin g o f the Units is to be con du c ted in

sep ara te p has es.

209. Al tho u gh a me ndm en ts to th e O ffe ri n g P la n sub seq ue n tly red u ce d the n um ber o f

Units o ffer ed to 391, n o ne of the ame n dm en ts o r any ot her o ffe ring d oc um e nts

state — o r e ven sug ges t — that: (i) the S po n so r has re trea ted from its p led g e to

“sell in g o od fa ith ” all o f the Units; (ii) the S pon sor has ex clu ded from o r hel d

back from the off e rin g any o f the re d uc ed nu m b er o f Hotel S u it e Units; (iii) the

o ff er in g of th e re d uc ed n um ber of U n its is is to be con d uc ted in se pa rat e phases.

210. Under th e O ffer ing Plan, each pur cha ser is re qu ired to sig n a P u rc h as e A gr e em ent

in the form att ach ed as E x hi bi t 1 to the Plan.

Co m p lain t Page 39




211. Each o f the P ur c ha sin g P lai n tif fs has s ig ned a P u rc h as e A gre em ent that is

identica l in su bs ta nc e to the form atta che d as E x h ib it 1 to the Plan, o the r tha n

b u sine ss te rm s suc h as Unit nu m b e r, pu rch a se pr ic e, d ep osi t am o u n t, da te an d the

like.

212. Under p a rag rap h 11.2 o f the P urc has e A gr eem en t: “The Plan is in cor por a te d

he rein [in to the P u rc ha se Ag ree m en t] by re fe renc e and made a p art he reo f w it h

the sa m e force and e ff e ct as if set forth h e rei n at le n g th .”

213. Under th e O ffe rin g Plan, any p ur cha ser of a Unit is requ ire d to be b ou nd b y at

least four ag ree m en ts that w ere then re cor d ed or w ere to be re co rded as bin d in g

en cu m b ran ces on the Unit w it h the O ffi ce o f the New Y or k C ity R e gi s te r (th e

“C ity R egi ste r” ):

a. a R es tr ic ti ve D ecl ara tion g ov e rn ing the use an d occ upa ncy o f the Unit;

b. the Co ndo min ium D ecla ra tio n ;

c. the C o nd om iniu m’ s B y- L aw s; and

d. a Unit M ana gem en t A g ree me nt.

214. C opi es of each of th ese fo u r do cum en ts were inc lud e d as e x hi b its to the Plan.

Th e R e s tric tiv e D ec lar at io n

215. In res pon se to the D ef end ant s’ an nou nc e me nt o f the T ru m p Soho, sev era l

co m m uni ty groups and go ver nm ent a l off icia ls ra ise d strong opp osi tion to seve ral

aspects o f the pro jec t.

216. One of the k ey g ro u n ds o f op po sitio n was a pe rce ived ri sk th at T rum p Soho

buyers w o uld u se th eir U ni t s for thei r pe rs o n al re s id enc e s, ra the r th an as tran sie nt

hotel rooms.





217. Th e T rum p Soho is located in an area zon ed M l -6 un der the New Y or k C ity

Z oni n g R es o lu ti on .

218. In an are a zo ned M1-6, use of p rop erty as a tran sien t ho tel is p erm itte d, but use

fhr re si de n ti al p urp ose s is proh ibi te d.

219. In o rde r to pre v en t re sid ent ial use o f the Tr u m p Soho and as a con dit ion o f is sui n g

a b ui ld in g pe rm it for its co nstr uct ion, the New Y or k Cit y D ep art m en t of

Buildings (“D OB ”) req uir ed the Spo nso r to file a rest rict ive dec lar a tio n pl aci ng

lim ita tio n s on the oc cup anc y o f Tr um p Soho Units.

220. On M ay 4, 2007, the Sp ons or re co rde d a res tric tive dec lara tio n da ted A pr il 26,

20 07 (th e “R est rict ive D ecla rat ion ”) w ith the C ity Re gis ter u nd er C ity R eg iste r

File Nu m be r (“ CR FN ” ) 20 077 05 010 038 500 1.

221. The key feature o f the R est r ict ive D ec lar a tio n is that it p roh ibit s each U n it from

being o ccu pie d by its ow ne r (o r any ot her ind ivi d ua l) for m o re th an 120 days in a

ca len dar yea r (a n d no m or e than 29 days in an y 36 day pe rio d), a nd th at w h e n the

Unit is not o ccu pied by its owner, it m u st be off ered for ren tal to the pu bl ic by the

Trump H ot e ls o r ano the r q ual ifie d bro ke r as re n tal agent.

2 2 2 . S pec ific a lly , S ec tion s 2 .02 (a) , (b) & (c) o f th e Re stri ctiv e D ecl ara tion pro v id e:

(a) No Unit m ay be occ up ied by its Unit Ow ne r o r by any ot h erindividual: (i) for a co nti nuo us peri od of more than 29 days in a n y 36 dayperiod; o r (ii) for a total o f m or e th an 120 days in an y cale nd ar year.

(b) At all tim es d ur in g w hic h a U ni t is not occ upie d by its U ni t O w n er,it shall be m ade ava ilab le on a da ily or w ee k ly bas is to no n-U nit O w n er sp u rs u an t to a ren ta l pr o gr a m o p era ted ei the r (i) by or o n b e ha lf of theM an age m en t C om pa n y o r (ii) th rou gh no m o re tha n five (5) (o r suchg rea ter nu mb e r as shall be m an da ted b y a pp lica ble de term ina tio n o f theS ec u ri ti es and E xc h an ge C o m m is sio n ) rental age n ts ap pro ved ( whi ch





ip pr o va l sha ll not be un rea son abl y wi thh e ld ) by the Boa rd, at occ upa ncyrates co mp ara b le to thos e at sim ilar ho tel s in New York City.

(c) All units shall be si m ila rly fu rni she d an d de co rate d . T h eC on dom in ium D o cu me n ts shall p roh ibi t each Unit Ow ne r from de co ratin gits Unit with an y pe rs o na l fu rn ishi n gs an d/o r de cor a tio ns. All d eci sion s asto the fu rni shi ng a n d de cor atio ns o f ind ivid u a l Units shall be m ad e by thed e cla ran t p rio r to the d at e on w h ich the Co ndo mi niu m is es tab lish ed forthe S u bje ct P rem ise s and by the C ond om iniu m the rea fter , and no UnitOw ne r shall have any d isc reti on as to the fur ni shi n gs of the in d iv id u alUnit(s) it owns .

223. Under this res tr ic ti on , the U nit ow n er is com pe lle d to use the U nit as an

in ve stm ent pr o pe rty for a large ma jori ty of the time.

224. Indeed, as de tail e d be low , a s igni fica nt p ort ion o f th e m a rk e ti ng o f the Units

cente red ar oun d th e in v es tme nt re turn s the Units co u ld p rovi de w he n not b ei ng

used by th eir o w n er s.

225. The R es tr ic ti ve D ec lar a tio n p rov ides for the en for cem en t of the occ upa ncy

re s tri ct io ns in its sec tion 2.02(a) thr oug h a req uir eme nt that, am o ng o the r th ing s ,

the Co ndo mi niu m rep o rt any v iol atio ns to the DOB and cha rge an y v iola ting Unit

o w n er a fin an cia l pe nal ty .

226. The first “S p e ci al Ri sk” in the Of feri n g Plan, s ta rt in g on p ag e 1 o f the P la n ,

su m m a ri ze s the p rov isi o ns o f the R es tric tive D e cla rat ion an d w h at the Tru mp

Soho will do to com pl y w it h its terms.

227. This “S p ec ial R is k ” sp eci fi es (at p age s 1-2) that:

p u rsu an t to the R es tric tive D ec la ra ti on , Hotel Suite U ni ts w he n noto ccu p ie d , will be req u ir ed, to be m ade av aila b le fo r occ upa ncy on a d ail yo r w eek ly b asi s thr oug h ei the r (i) the Ho tel M a n ag e m ent C om pa n y[Trump H ote ls] ; o r (ii) a Q ual ifie d B ro ker (a h ere ina fter de fi ne d) and atoc cup an c y rat es c om par abl e to th ose at ho tel s s imi lar to the C o nd om iniu min New Y or k City. T he [C on d om in iu m ] Board will ma inta in a lis t o ff ive







Th e C on dom in ium B y -L a ws

234. Th e O ffer ing Plan also co nta ine d a cop y o f the C ond om iniu m’ s B y -L aw s, w h ic h

were til ed w ith the C ity Re g ist e r on M ay 6, 2010 as a n ne xed to the C on do m in ium

Declaration.

235. In co ntr ast to typi cal con dom in ium B y-L aw s wh ich pr ovi de for the pro mp t tu r n

o v er of control o f the con do m in ium ’s bo a rd o f directors from the Sp on sor to the

Unit o wne rs w hen 5 0% o f the co ndo mi n iu m is sold, Ar ticl e 2 o f the T rum p

Soho’s By -L aw s pr ovid e that D ona ld T rum p, Al ex Sa p ir and Ju liu s S chw arz are

des ig na ted as the initial bo ard of d ire c tor s o f the Co n do mi n iu m until

C ond om ini u m’ s first annual m eet ing , w hi ch m ay be h el d as late as on e yea r an d

30 da ys a fte r the first c los ing o f a sa le o f a Unit, and th en the Sp ons or has the

ab solu te rig h t to d esig na te a m ajo rity o f the b oar d o f dire cto rs of the

C ond om ini u m until the Sp on sor has so ld 90 % of its in te re st in the C on d om ini u m

Units, for up to a m ax imu m o f five years.

236. Even afte r the exp ira tion o f the pe rio d w hen th e S po n so r has the abs olu te right to

d esig n at e a m aj o rit y of the mem be rs of the bo ard o f directors o f th e

C o nd om iniu m, the Sp o ns o r m ay still co ntin ue to con trol the b oar d of dire cto rs o f

the Co n do mi n iu m th rou gh vo ting its in ter ests in an y Units it owns .

237. Further, the Sp ons or ret a in s the ab solu te right to ap poi nt one me mb er o f the b o ar d

for so long as it ow ns at least two Units.

238. The B y- L aw s also set forth m any o f the num er ous fees, charges, and exp ens es

that Un it o w n e rs at the Tru mp Soho are req u ire d to pa y w hil e the y own and

occ u py the ir Units.

C om pla int P age 44




239. A rtic le 1 5 o f the B y -L aw s sets tbrth that the u se and occ upa ncy o f the Tru mp

Soho is su bj ec t to the res tric tion s con tai n ed in the Re str ic tiv e D e cla rat io n.

240. Article L6 o f the B y -L aw s req u ir es that, at the cl os ing o f ti tl e to e ach Unit, the

p u rc ha ser e xec ute a U ni t M an ag em e nt Ag reem en t w ith the Hotel Ma nag em ent

C om pa n y, T rum p H ot e ls , in a sp ec ifie d form.

Th e U ni t M a na g em en t A gr ee m e n t

241. The o ri g in al O ffe ring P lan co n ta in ed a form o f the Unit M a na g em en t A gre em e nt

that each pur cha ser w o u ld be re q ui red to e xe cut e upo n the c los ing o f title to the

p ur cha se r’ s Unit.

242. The Fifth Am en d me nt to the O ff er in g P la n da ted Jul y 23, 2008 c ont ain ed an

am en d ed form Unit M a na g em en t A gr eem en t.

243. The am en de d form U nit M an age m en t A gr eem en t was filed w ith the C ity Re gist er

on M ay 6, 2010 as an ex h ib it to the By-Laws un d er the same fi l in g as the

C on do m in ium De c la rati o n.

244. Under S e ctio n 3(a) o f the U n it M ana g em en t A gr ee m e nt , T rump H o tel s is

re spo n si b le for ce rta in “M and ato ry S er vi ce s”, in c lu d in g “es tab lish ing roo m rental

ra tes.”

245. The U n it M ana gem en t A gre em e nt sets forth m any m o re o f the nu me rous fees,

charges, and ex p en ses th a t U nit o w ne rs at th e Tru mp Soho are re q uir ed to pay

while they ow n and o c cu p y th e ir Units.

246. Am on g th e fees pa yab le to Tr u m p Ho tel s in th e Unit M an ag em e nt Ag ree m e n t is a

“Unit M an age m en t Fee” un der S ec ti on 7(a) in the am o u nt o f the g reat er of





SI .000.00 per year or $15.00 per night the Unit is occupied (either by the Unit

owner or a hotel guest), each of which is increased by 3% annually.

247. One significant aspect of th is Unit Management Fee is that if Trump Hotels is

designated by the Unit owner as the Unit’s rental agent, this fee is rebated to the

Unit owner, bu t if the Unit owner employs another “Qualified Broker” as rental

agent, the Unit owner becomes fully subject to this fee.

FALSE AND MISLEADING STATEMENTS MADE BY DEFENDANTS

Actual Unit Sales By Date

248. Almost immediately after the Defendants began to offer Trump Soho Units , they

began making false and misleading statements regarding the development, an d in

particular the number and percentage of Units sold.

249. As discussed below many of the statements made by the Defendants are shown to

he false by reason of an “Affidavit in Support of Declaring the Plan Effective”

sworn to by Alex Sapir on March 30, 2010 (the “Sapir Affidavit”) filed in

connection with the Tenth Amendment to the Offering Plan (accepted for filing

and publicly available May 5, 2010) which disclosed the actual number of bona

tide Purchase Agreements that the Sponsor had entered into and listed the Unit

number and date of each such Purchase Agreement.

250. The Sapir Affidavit certified that : “As of March 30, 2010, [Purchase] Agreements

had been accepted for sixty-two (62) Hotel Suite Units. . . representing 15% of

the three hundred ninety-one (391) Hotel Suite Units presently offered under the

Plan.”

Complaint Page 46




251. Exh ibit A -i to the S api r Af fida vit id en tifi ed each of the 62 Unit P ur cha se

A g re eme n ts by Unit n um ber and by th e d at e th e A g ree me nt w as signed. S o rt in g

this in fo rm atio n by A gre em ent Date, the fo llo w in g table sho w s the nu mb e r of

Units so ld by da te, as well as the p erce nta g e o f Units sol d of the total n u m b er

the n -o ffe re d .

9/7/2007 902 1

9/7/2007 1703 2

9/7/2007 1803 3

9/7/2007 1805 4

9/7/2007 2303 5

9/7/2007 3009 6 413 1.45%

9/14/2007 1402 7

9/14/2007 2003 8

9/14/2007 2606 9

9/14/2007 3208 10 413 2.42%

9/20/2007 1102 11

9/20/2007 1903 12

9/20/2007 3010 13

9/20/2007 3410 14 413 3.39%

10/4/2007 1202 15

10/4/2007 1802 16

10/4/2007 1811 17

10/4/2007 2902 18

10/4/2007 3810 19

10/4/2007 3910 20 413 4.84%

10/9/2007 1502 21

10/9/2007 2603 22

10/9/2007 2702 23 413 5.57%

10/16/2007 2704 24 413 5.81%

10/23/2007 1905 25

10/23/2007 2205 26

10/23/2007 2403 27

10/23/2007 3104 28 413 6.78%

10/25/2007 2006 29

10/25/2007 2408 30 413 7.26%

10/28/2007 2611 31 413 7.51%

11/9/2007 1004 32 413 7.75%

11/13/2007 2508 33

11/13/2007 2610 34 413 8.23%

11/16/2007 2108 35

11/16/2007 2805 36 413 8.72%

11/28/2007 2111 37

11/28/2007 2905 38 413 9.20%

12/10/2007 3406 39 413 9.44%

12/14/2007 2202 40

12/14/2007 2304 41

12/14/2007 2511 42 413 10.17%

12/20/2007 1002 43 413 10.41%

12/27/2007 3109 44 413 10.65%

1/8/2008 3108 45 413 10.90%

1/11/2008 2411 46 413 11.14%

1/28/2008 2509 47 400 11.75%

2/13/2008 2811 48

2/13/2008 3005 49 400 12.25%

3/22/2008 2106 50 400 12.50%

4/16/2008 2506 51 400 12.75%

5/1/2008 2505 52 400 13.00%

5/9/2008 2711 53

2705 &

5/9/2008 4009* 54 400 13.50%

5/12/2008 3509 55 400 13.75%

6/5/2008 2405 56

6/5/2008 2806 57

6/5/2008 3709 58 400 14.50%

7/2/2008 3203 59

7/2/2008 3309 60 400 15.00%

Agreement Unit Units Total Agreement Unit Units TotalDate No. Sold Offered % Sold Date No . Sold Offered % Sold

C o mp lai n t Page 47




A gr eem en t Un it Un its T o ta l A g ree m e nt U n it U n its T o ta lD at e N o. So ld O ff e red % S ol d D ate No . S o ld O ffe red % S o ld

7 /2 3 /20 08 38 03 61 4 00 15. 25%* A n o te t o t he S api r A ffi d av it e xpl ains : “T h es etw o u n it s are su b jec t to sepa rate p ur c ha se12/ 4/2 0 08 24 04 62 400 15 .50 %a gr e em e nt s to the sam e pu rch ase r; h ow e v e r, o nl y

8/1 9 /2 0 09 62 391 15 .86 % on e o f th e m is incl ude d in th e co unt o f 62 u n it s fore ffe cti v en e ss pu rpo ses. ”

In an Au gu s t 19 , 2 00 9 Am end me nt t o th eO ffe rin g Plan , the n u mb er o f uni ts w as red uce dfr o m 4 0 0 to 3 91 . Th e n um be r of un its had b ee np revi o us ly redu ced fro m 4 13 to 4 0 0 in an Jan uar y2, 20 0 8 Am en dm ent to t h e O ff er in g Pl an.

F al s e S tate me n ts M ad e to th e Pa lm e r G a rd e ns P la inti f fs

252. On Ja nua ry 9, 2008. RacheL Ge rst e in v is it ed the Tr u m p Soho sales o ff ic e and S ara

Cl eph ane told her that 30 -40 % o f th e U ni ts h a d bee n sold .

a. Rachel G er stei n just ifia b ly re li ed on this sta tem en t in d e cidi n g to e n ter

into the P u rc h a se Ag reem en t on be h a lf o f P alm er Gardens.

b. This s tat e me nt was false w he n it was m ade b ec aus e , as sw orn to in the

Sapir A ff id a vi t, on Jan u ar y 9, 2008 on ly 10.9% o f the Units ha d b ee n sold.

253. In her Jan uar y 9, 2008 v is it to th e Tr um p Soho sales o ffi ce, Rachel G er ste in w as

told by Sara C leph an e th a t b uy ers w er e pur cha sin g as ma ny as thr ee to five Units.

a. R ach e l G erste in jus tifi abl y re lie d o n thi s s tat e me nt in d ec id in g to e nte r

into the Pu rch a se A g re e m e nt on b eha lf o f P alm er Gardens.

b. T h is s tate m en t was fa ls e w h en it w as m ad e be ca u se , as sw o rn to in the

Sapir A ff id avi t, o n ly on e o ut of the 62 b u y er s pu rch ase d m ult iple Units

and that o ne b uy er pu rch ase d ju st two Units.

254. On Ja nua ry 15, 2008, an A ss o cia ted Press w ire se rvi ce re p or t, w h ich de scr ibe d

the ne igh bor hoo d op po sitio n to the p ro je ct , th e de a th o f a co nst ruc tion w o rk er an d





the v io la tio n s the p roje ct re ce ive d , st at ed that the d ev elop ers b oa ste d there w ere

3.200 p urc has e ap p lic a tio ns for the 400 Units.

a. The Jan u ar y 15, 2008 a rtic le was read and jus ti fia b ly re li ed u pon by

Rachel G ers tein in de cid ing to e nte r into the Pu rch ase A gre em e nt on

b eh a lf of P alm er G ar de n s.

b. On inf o rm ati o n and belief, the S p on sor and re pre sen tati ves an d ag e nts of

the S p on sor w ou ld be the on ly p ers on s who co u ld p ro v id e in form at ion

rega rd in g the n um be r o f pur cha se ap p lic a tio n s.

c. On inf o rm ati o n and belief, the in form at ion that there w er e 3,200 p urc has e

ap p li c ati o ns for the 400 Units was pr ovi d ed to the A ssoc iat e d Pr ess b y the

S p o n so r o r a rep res ent a tiv e or age n t of the Sponsor.

d. On in for m ati on and belief, the in fo rm at io n rega rdi n g the nu mb er o f

pu rch ase a pp lica tio n s w as false and m is lea d ing w h en it was made. Th e

basis for this b e lie f is th at on Jan u ary 15, 2008, o nl y 11.14% o f the Units

had be en so ld a c co rdi n g to the S ap ir A ffid a vi t and, if th ere we re su c h a

w a it in g list, it is re as o na b le to b el ieve t hat a m u ch hig her p erc ent a ge of

Units w o ul d ha v e b ee n so ld at tha t time o r sh ort ly th er ea fte r.

255. On Ja nu ary 25, 2008, S ar a C le p ha n e to ld R ac h el Ge rste m th at ce rtai n lines w er e

almost sold out.

a. Rachel Ge rste in ju st ifia b ly relie d on this s tat em e nt in d eci d in g to en ter

into the P u rc h as e A gr e em ent on b eh a lf o f P a lm er Gardens.





I,. This statement was thise when it was made because, as sworn to in the

Sapir Affidavit, none of the lines of Units was even close to being sold

out.

256. On or shortly before January 28, 2008, Rachel Gerstein signed the Purchase

Agreement on behalf of Palmer Gardens, and she, Joyce Gerstein and Herbert

Gerstein paid the Initial Deposit funds in reliance on the false statements that had

been made to Rachel Gerstein.

257. Had the false statements identified herein no t been made to and justifiably relied

upon by Rachel Gerstein, she, Joyce Gerstein and Herbert Gerstein would not

have agreed to purchase the Unit and Palmer Gardens would not have entered into

the Purchase Agreement.

258. A March 30, 2008 New York Magazine article related to the history and problems

with the Trump Soho development, described the Trump Soho sales process in

detail, and stated that the author was told by a Trump Soho representative that the

building was 60% sold.

a. This article was read and justifiably relied upon by Rachel Gerstein in

deciding to pay the Additional Deposit on behalf of Palmer Gardens.

b. On information and belief, the Trump Soho sales agents, or other agents of

the Sponsor, discussed in the article provided the author with the

information that the building was 60% sold.

c. This statement was false when it was made, as sworn to in the Sapir

Affidavit, on March 30, 2008 only 12.5% of the Units had been sold.

Complaint Page 50




259. A June 2. 2008 artic le in The Real D eal ab o ut int e rn a tio n al bu y er s at Tr u mp S o h o

and W illi am B eav er House, st at ed that Rodrigo Nino said 58% o f the T ru m p Soho

Units w er e und er c on trac t.

a. T h is arti cl e was read and jus tifi a bly re lie d u po n by Rachel G erste in in

d ec id in g to p ay the Ad dit iona l De p os it on be h al f of P alm er G ard ens .

b. On in fo rma tio n and bel ief R od n go Nino to ld the aut hor o f the ar ticl e th a t

58% o f the Tr u m p Soho Units were un der con tra c t.

c. T h is s tate me n t was false w h en it w as m ad e be cau se, as sw or n to in the

Sapir Af fid av it , on Ju ne 2, 200 8 on ly 13.75% o f the Units w er e un d er

co n tr act .

260. A June 27. 2008 a R eu te rs wi re ser v ic e article, w hi ch de scr ibed ho w the w ea k

d olla r has a ttra cte d fo re ig n b u ye rs to T rum p So ho, sta t ed that Iv an ka T ru m p said

60% o f the Units w ere sold.

a. T hi s artic le was re ad an d ju s tifi a bl y rel ie d u po n b y R ache l G er stei n in

d ec idin g to p ay the A dd itio nal D ep os it o n beh alf o f Pa lme r G arde n s.

b. On in fo rma tion and b e lie f, Iva n k a T ru m p to ld th e a uth o r of th e ar ti cl e th e

sta tem e nt th at 60% o f the U nits w er e sold .

c. T hi s sta tem ent w as fal se whe n it wa s m ad e b ec aus e , as sw o rn to in the

S ap ir Af fida vit , by Ju ne 27, 2008 o n ly 14.5% o f the Un its h ad b een sold.

261. On Jul y 17, 2008, Sara C le p ha ne e-m ai led R ac h el Ge rste m and told h er th a t he r

Unit’s line w as “ pre tty mu ch so ld o ut .”

a. R a ch el G er s tei n jus ti fi ab ly re lie d on this s tat em e nt in d ec idin g to pa y her

A d d iti o na l Deposit.





h. T his s tate m e n t w as Ihise w h en it was m ad e be cau se, as sworn in the Sap ir

A ff ida v it , on this date, on ly 7 o f the 34 Units in the 1 )9” line were sold.

262. On o r abo u t July 28, 2008, P alm er G ar d en s paid its A dd ition al D ep o sit in re lia n ce

on the flilse s tate me nts m ad e to Rache l G ers te in .

263. Had the false st a tem en ts id enti fied h er e in not been m ad e and ju s tif iab ly re lie d

upon by to Rachel G er stei n, she, Jo yc e G er st ei n , H erb er t G erste in and P al m er

G ard ens w o uld not h a v e paid Pa lm e r Gardens’ A dd itio n al Deposit.

Fa ls e S tat e m e nts M ade to th e M altz P la inti f fs

264. On S epte mb er 20, 200 7, Sara C le ph an e, D ire c to r o f Sales, e-m aile d A lan Maltz

stating that “W e op e n to the pub lic today. T h e dem an d is ove rw h elm in g . We

have 1,400 pe o pl e on a w ai t list.”

a. Alan Maltz jus tifi a bl y re li ed on this sta tem en t in de c id ing to en ter into his

Purchase A g reem en t.

b. O n info rm a tio n and belief, Sa ra C lep ha n e’s st at e m en t r e ga rdin g the

wa itin g list was fal se an d m is le ad ing w hen it w a s made. T he b asi s for this

be li ef is th a t on S ep tem be r 20, 2 00 7 , as sw or n to in the S ap ir A ffi d av it,

only 3 .39% of the Units had actu a lly be en sold and if th e re w as su ch a

w aiti n g list, it is re a so n ab le to bel i eve that a m u ch hig he r pe rce n tag e of

Units w ou ld have been so ld at that tim e o r s h or tly th er eaf te r.

265. In Se p tem be r o f 2007, S ara C le p h an e o ra lly told Al an M al tz th a t a ppr oxi mat ely

70% o f the U n it s had bee n sold.

a. A la n M altz ju st ifi abl y re l ied on this st a tem en t in de c id in g to e nt e r into his

Purchase A gre em en t.





I,. This statement was false when it was made because, as sworn to in the

Sapir Affidavit, on September 20, 2007, contracts for only 3.39% of the

Units had been signed.

266. On or shortly before October 25, 2007, Alan Maltz an d Janet Maltz signed the

Purchase Agreement in reliance on the false statements that had been made to

Alan Maltz.

267. Had the false statements identified herein no t been made to and justifiably relied

upon by Alan Maltz, he and Janet Maltz would no t have entered into the Purchase

Agreement.

268. On or about April 25, 2008. Alan Maltz and Janet Maltz paid their Additional

Deposit in reliance on the false statements made to Alan Maltz.

269. Had the false statements identified herein not been made to and justifiably relied

upon by Alan Maltz, he and Janet Maltz would not have paid their Additional

Deposit.

False Statements Made to the Tsai -Singh Plaintiffs

270. On or shortly before September 7, 2007, Hubert Tsai and Anthony Tsai signed the

Purchase Agreement.

271. In early March of 2008, a Trump Soho sales representative told Hubert Tsai that

the building was selling faster than expected and that approximately 50% of the

Units have already been sold.

a. Hubert Tsai justifiably relied on th is statement in deciding to pay his

Additional Deposit.

Complaint Page 53




h. This statement was false when it was made because, as sworn to in the

Sapir Affidavit, on March 22, 2008 only 12.5% of the Units had been sold.

272. On or about March 7, 2008, Hubert Tsai and his brother Anthony Tsai paid their

Additional Deposit in reliance on the false statements made to Hubert Tsai.

273. Had the false statements identified herein not been made to an d justifiably relied

upon by Hubert Tsai, he would not have paid his additional deposit.

274. On April 7, 2008, Prodigy emailed Hubert Tsai an excerpt from an article entitled

Trump Soho Condominium Outpacing Sales Predictions” in which Rodrigo Nino

was quoted as saying that since sales commenced in September of 2007, global

buyers had purchased nearly 53% of the building.

a. On information and belief, Rodrigo Nino told the author of the article

excerpted that, since sales commenced in September of 2007, global

buyers had purchased nearly 53% of the building.

b. Christine Sing justifiably relied upon this statement in deciding to

purchase Anthony Tsai’s rights and obligations under the Purchase

Agreement.

c. This statement was false when it was made because, as sworn to in the

Sapir Affidavit, on April 7, 2008 only 12.5% of the Units had been sold.

275. Effective as of May 15, 2008 (by documents signed in September 2008), Tsai

assigned his rights and obligations under the Purchase Agreement to Christine

Singh, who agreed to assume those rights and obligations and to pay Anthony

Tsai his share of the Deposit in reliance on the false statements made to Hubert

Tsai.

Complaint Page 54




276. [lad the Ihise statements identified herein not been made, and no t justitiably relied

upon by Christine Singh, she would no t have assumed the rights and obligations

under the Purchase Agreement of Anthony Tsai and would no t have paid Anthony

Tsai thr his share of the Deposit .

False Statements Made to the Feng-Meckel-Gross Plaintiffs

277. In October and November 2007, prior to agreeing to purchase Unit 2202, Randall

A. Meckel orally and by e-mail inquired of Thomas Postilio about the availability

ofat least 10 separate Units (Units 806, 808, 811, 1004, 1111, 1611, 1802, 2011,

2211 and 2611), and was advised by Thomas Postilio that each of these Units had

already been sold.

a. However, as sworn to in the Sapir Affidavit, all but one of these Units

(Unit 1004) were in fact unsold at the time Thomas Postilio told Randall

A. Meckell that the Units were already sold.

b. Randall A. Meckel justifiably relied on these statements of Thomas

Postilio’s regarding Units that had been sold and agreed to purchase Unit

2202 at a price higher than those listed for other Units.

278. In early November of 2007, Thomas Postilio of Trump Soho told Randall A.

Meckel, who was visiting the Trump Soho Sales Office, that over 30% of the

Units had been sold.

a. Randall A. Meckel justifiably relied on this statement in deciding to enter

into a Purchase Agreement.

Complaint Page 55




h. This statement was false when it was made because, as sworn to in the

Sapir Affidavit, on November 9, 2007, only 7.75% of the Units had been

sold.

279. Prior to signing their Purchase Agreement on or before December 14, 2007, a

Trump Soho representative stated to Randall A. Meckel that over 50% of the

Units h ad b een sold.

a. Randall A. Meckel justifiably relied on th is statement in deciding to enter

into a Purchase Agreement.

b. This statement was false when it was made because, as sworn to in the

Sapir Affidavit, on December 14, 2007, only 10.17% of the Units had

been sold.

280. On or shortly before December 14, 2007, Xue Feng, Randall A. Meckel and

Henry Gross signed their Purchase Agreement in reliance on the false statements

made to Mr. Meckel.

281. Had the false statements identified herein not been made to and justifiably relied

upon by Randall A. Meckel , he, Xue Feng and Henry Gross would not have

entered into the Purchase Agreement.

282. A February 13, 2008 Curbed NY article about international and domestic

purchasers stated that, according to Sales Director, Rodrigo Nino, 53% of the

Units had been sold

a. This article was read and justifiably relied upon by Randall A. Meckel in

deciding to pay the Additional Deposit for the Unit he purchased with Xue

Feng and Henry Gross.

Complaint Page 56




1. The C urb ed NY art ic le retèr enc ed a Fe b ru a ry 12, 2008 New York O bse rve r

a rti c le (d isc u sse d b elo w ) as th e s o ur ce of the inf o rm atio n p rov ide d by

Rodrig o N ino.

c. On in fo rm atio n and belief, Rodrigo Nino to l d the au th o r o f the New York

O b serv er ar ticl e th at 53% o f the Units had been sold.

d. T h is st a tem en t was fa lse w h en it was m ad e b ec aus e, as sw o rn to in the

Sapir A ffid avi t, on F eb rua ry 13, 2008, o nly 12.25% of the Units had been

sold.

283. A March 5, 20 08 ar ti cl e in The Villager ab out the he ari ng b e fo re the New Y ork

City Board o f St a nd ard s an d A p p ea ls on the New York C ity D epa rtm en t of

Building’s de cis ion to gr ant the pro jec t a bu ild i n g permit, state d th at 53% o f the

400 Units we re sold.

a. Th is ar ticl e was re ad and jus tifia b ly re l ied up o n by R an da ll A. Meckel in

d e cid ing to su b m it th e Ad dit ion a l D epo sit for the Un it he p u rch ase d w it h

X ue Feng and H en ry Gross.

b. On in fo rma tio n and belief, the D e fen d an ts (e ith e r dire ctly or t hro u gh

sta te m en ts to o ther pub lic at io n s) p ro vi d ed The Villager w it h th e

inf o rm ati on that 53% o f the 400 Units w ere sold.

c. T h is st a tem en t was fa ls e w h en it was ma d e b ec aus e , as sw o rn to in the

S api r A ffi dav it, on M arch 5, 2008 o nl y 12.25% o f th e U n it s ha d been sold.

O n o r about Ju ne 14, 2008, Xue F eng , R and all A. M eck el and H enr y G ro ss pa id thei r

A d di ti on a l D ep o sit in re li an ce on the fa lse st at eme n ts m ad e to R an da ll A. M eck el.





234. [lad the Ihise statements identified herein no t been made to and justifiably relied

upon by Randall A. Meckel, he, Xue Feng and Henry Gross would no t have paid

their additional deposit.

False Statements Made To The Beaver Metal Plaintiffs

285. On or about April 8, 2008, Acacio Rodriguez and Javier Rodriguez attended the

SIMA (Madrid Real Estate Exhibition International) where they met with Ferran

Fontal of Baobab 3i.

286. At the SIMA, Ferran Fontal provided Acacio Rodriguez and Javier Rodriguez

with a brochure that contained, among other things, certain financial projections.

a. The financial projections stated that the project would have a Return on

Investment of 76.83%, an Internal Return Rate of 19.3%, and other

detailed financial information.

b. These statements were false when they were made because they were

unrealistic, not based on reasonable andlor supportable assumptions, and

were made without justification.

c. These statements were made without any disclaimers about relying on

forward-looking information.

d. These statements were justifiably relied upon by Acacio Rodriguez and

Javier Rodriguez in deciding to enter in to the Purchase Agreement on

behalf of Beaver Metal, LLC.

287. On April 15, 2008, Javier Cerro Diaz, International Sales Manager at Baobab 3i,

emailed, among other things, financial projections to Acacio Rodriguez and Javier

Rodriguez.

Complaint Page 58




a. The financial projections stated that the project would have a Return on

Investment of 153%, an Internal ReturnRate of 80%, and other detailed

financial information.

h. These statements were false andlor misleading when they were made

because they were unrealistic, no t based on reasonable andJor supportable

assumptions, and were made without justification.

c. These statements were made without any disclaimers about relying on

forward-looking information.

d. These statements were justifiably relied upon by Acacio Rodriguez and

Javier Rodriguez in deciding to enter in to the Purchase Agreement on

behalf of Beaver Metal, LLC.

288. In April of 2008, Acacio Rodriguez contacted Marcela Carrillo, who informed

him that more than 70% of the Units had been sold.

a. This statement was justifiably relied upon by Acacio Rodriguez and Javier

Rodriguez in deciding to enter in to the Purchase Agreement on behalf of

Beaver Metal, LLC.

b. This statement was falsewhen it was made because, as sworn to in the


289. Th e April 2008 issue of In the World Magazine, a Spanish real estate promotion

magazine, published an article that quoted Donald Trump as stating thatSpanish

purchasers had invested $250 million of the $800 million total offering, which

implied that at least 31% of the Units had already been sold.

Complaint Page 59




a. T h is st ate m en t was read and ju st it iab ly re li ed u p on by A cac io R od rig uez

and Ja v ie r R odr ig ue z in de c id ing to en ter into the P u rc h as e A gre em ent on

b e ha lf o f Be ave r Metal, LLC.

h. On in fo rma tion and b elie t Donald T ru m p to ld the au tho r of the a rtic le t ha t

Spanish p ur c ha ser s had in ve sted $250 m illi o n o f the $800 m ill io n to ta l

offering.

c. This s tate m en t w as false w hen it was m a de be cau se, as sw orn to in the

S ap ir A ff id a v it, on April 16, 2008 on ly 12.75% o f the Units had been sold.

d. This sta tem en t is also false in that, on in fo rm a tio n and b eli ef , the to ta l

a m o un t o f m one y ac tua lly in ve ste d in the T ru m p Soho thr o ug h the dat e o f

the S ap ir A ff ida v it was less th an $30 million.

290. A June 29, 2008 art icl e in The L o nd o n Tunes, w h ic h d esc ribe d the T ru m p Soho

project and the T ru m p c h ild ren ’s inv o lv e m en t in the pr o je ct , stat ed that Iva n ka

Trump said 60% o f the Units we re sold.

a. This a rti c le was read and ju s ti fia b ly rel ie d upo n by Ac aci o R od rig u ez and

Jav ier R o d rig u ez in d ec idin g to ent er into the Pu rch ase A g ree me nt on

be h al f o f B ea v er M eta l, LLC.

b. On in for m ati on and b el ie f Iv ank a T ru m p to ld the aut h or o f the ar ti cl e that

60% o f the Units were sold.

c. This s tat em en t was false w hen it was m ad e b eca use , as sw orn to in the

Sapir A ff ida v it, on Ju ne 29, 2008 only 14.5% of th e U ni t s had been sold.

C om pl a in t Page 60




201. On or sho rtly b et b re Ju ly 2, 2008, Ja vie r R o d ri gu ez sig ne d the P ur ch a se

A gre em ent on b e ha lf of B eav er Metal, LLC in rel ian c e on the false s tate m e n ts

made to Javi e r R o dri gue z and A caci o R od rig uez.

292. Had the false st at em en ts ide ntif ied he rein no t be en m ad e to and ju st if ia bl y re li ed

upon by A ca cio R od rig ue z , he w ou ld not have a gre ed to pur cha se the Unit and

Beaver Metal w ou ld not have ent ere d into the P urc has e A g ree m en t.

293. On o r ab out De c em be r 2. 2008. B eav er Metal, L[.C subm itt ed its A d d it io na l

Depos it in re lia n ce on the false st a tem en ts m ad e to non -pa rty Jav ier R o d rig uez

and A c ac io R o dr ig ue z .

294. Had the false st at em e n ts ide n tif ie d he re in n o t b ee n m ade to and ju sti fi ab ly re li ed

upon by A ca cio Ro d ri g ue z , he and B ea ver Metal w o u ld not have paid the S ec ond

Deposit.

Fal se S tate m e n ts M ad e to th e C red ibo x P lain tiff s

295. En N ove mb er o f 2007, an artic le in M a gn a te In m o b ili a rio , a S pa n is h pub lica tio n

d isc us si n g S pan ish in ve stm en t in T ru m p Soho, sta te d that 15% o f th e Units at

Trump Soho ha d been p urc has ed b y S pa n is h in div idu als and co m p ani es , an d th a t

a total of 53% o f th e Units had b ee n so ld.

a. F el is a H ern an d ez read an d jus ti fi ab ly re lie d on th is st ate m en t in d eci d in g

to en ter into the P ur ch a se A g re e me nt on be hal f o f C re d ib o x.

a. O n in form at ion and belief, the S p on sor and re pre sen tati v es an d ag en ts o f

the S po nso r w o uld be the on ly p ers ons who co uld p rov ide info rm atio n

C om pla int Page 6 1




regarding the percentage of Units purchased by Spanish individuals and

companies and overall sales percentage.

b. On information and belief, the Sponsor or the Sponsor’s representatives or

agents directly or indirectly provided Magnate Inmobilario with the

information that 15% of the Units a t Trump Soho had been purchased by

Spanish individuals and companies, and that a total of 53% of the Units

had been sold.

c. This statement was fa ls e when it was made because, as sworn to in the

Sapir Affidavit, through November, 2007, only 9.2% of the Units had

been sold .

296. A March 18, 2008 article in Calculadora de Hipotecas, a Spanish publication,

stated that Trump Soho had already attracted 98 million euros from Spain and that

15% of the Units had been purchased by Spanish individuals and companies.

a. This article was read and justifiably relied upon by Felisa Hernandez in

deciding to sign the Purchase Agreement on behalf of Credibox.

a. On information and belief, the Sponsor and representatives and agents of

the Sponsor would be the only persons who could provide information

regarding the amount of investment from Spain and the percentage of

Units purchased by Spanish individuals and companies.

b. On information an d belief, the Sponsor or the Sponsor’s representatives or

agents directly or indirectly provided Calculadora de Hipotecas with the

information that 15% of the Units at Trump Soho had been purchased by

Spanish individuals and companies.

Complaint Page 62





Sapir Affidavit, on March 18, 2008, only 12.25% of the Units had been

sold.

d. This statement was also false when it was made in that, on information

and belief, the total amount of money actually invested in the Trump Soho

through the date of the Sapir Affidavit was less than $30 million.

297. On July 3, 2008, an article in Periodista Digital, a Spanish publication, stated

Spanish investors had invested about 98.5 million Euros in Trump Soho, and that

15% of the Units had been purchased by Spanish buyers.

a. This article was read and justifiably relied upon by Felisa Hernandex in

deciding to enter into the Purchase Agreement on behalf of Credibox.



regarding the amount of investment from Spain and the percentage of

Units purchased by Spanish individuals and companies.

b. On information and belief, the Sponsor or the Sponsor’s representatives or

agents directly or indirectly provided Periodista Digital with the

information that Spanish investors had invested about 98.5 million Euros

in Trump Soho and that 15% of the Units at Trump Soho had been

purchased by Spanish buyers.


Sapir Affidavit, on July 3, 2008, only 15% of all the Units had been sold.

Complaint Page 63




d. This statement was also false when it was made in that, on information

and belief, the total amount of money invested actually invested in the

Trump Soho through the date of the Sapir Affidavit was less than $30

million.

298. Prior to entering into the Purchase Agreement on or shortly before August 2, 2008

on behalf of Credibox, Felisa Hemandez was told by Sandra Dominguez that 50%

of the Units had been sold.

a. This statement was justifiably relied upon by Felisa I-lernandez in deciding

to enter into the Purchase Agreement on behalf of Credibox.


Sapir Affidavit, prior to August 2, 2008, only 15.25% of the Units had

been sold.

299. On or shortly before August 2, 2008, Felisa Hernandez signed the Purchase

Agreement on behalf of Credibox in reliance on the false statements made to her.

300. On October 30, 2008, an article in Por Guillermo, a Spanish publication, stated

that 22% of the Units had been purchased by Spanish buyers.

a. This article was read and justifiably relied upon by Felisa Hernandez in

deciding to submit the First Additional Deposit and Second Additional

deposit on behalf of Credibox.



regarding the percentage of Units purchased by Spanish individuals and

companies.

Complaint Page 64




b. On intb rm a tio n and b el ie t the S p on sor o r the S po n so r’s rep res e nt a tiv e s o r

agen ts di rec tly or in dir e ct ly pro v id ed P or G uil le rm o w ith the in lbrm ati on

that 2 2% of the Units had been p u rc h as ed by S pa n is h buyers.

c. This sta tem en t was false w hen it was m ad e be cau se, as sw or n to in the

Sapir A ff id av it, on O ct o be r 30, 2008, o nl y 15.25% of the Units had been

sold.

301. On o r a bo u t De cem be r 4, 20 08 , Cr e dib ox sub m itt ed its First A dd itio n al De p osi t in

reliance on the false s tat e me nts m ade to F eli sa H ern an dez .

302. Had the false s tate me nts id ent if ie d h er e in not b e en m ade to an d ju s tif iab ly re lie d

upon by Felisa H ern a nde z . she w o ul d not have agr eed to p ur cha se th e Unit an d

C re d ib ox w ou ld not have en tere d into the P ur ch a se A g ree m en t.

303. On or abo u t F eb ru ar y 15, 2009, Cre dib ox su b m it te d its S ec o nd A dd itio n al

Deposit in rel ia n ce o n the false s tat e me nts m ade to F eli sa H er n an d ez .

304. Had the false sta tem e nt s id en ti fi ed h er e in not b een m ad e to and ju stif iab ly re li ed

upon by Felisa H er na n d ez , she and Cre dib ox w ou ld not have paid its A d di tion al

Deposits.

A dd itio nal F a ls e S ta te m e nt s to th e P re ss an d R eli anc e b y Pl a in ti ffs

305. On S ep tem ber 19, 2007, the T ru m p Soho he ld its sa les k ic k of f gala, ab ou t w h ic h

a S ep tem b er 27 , 2007. a Da ily News ar ti cl e re p or ting on the eve n t qu o te d D o nal d

Trump as stating: “ W e a lre a dy have a 3,200 p ers o n w a it in g lis t to see th e U n its .”

a. On inf or m atio n an d be li e f, D on ald T ru m p to ld the au tho r of the art ic le th a t

there was a 3,200 pe rso n w ait in g lis t to see the Units.





b. On infb rm atio n and b e lie f the a lleg atio ns reg ard ing the w a iti n g list w ere

false and m is lea d in g w he n they w ere made. Th e bas is lbr th is b e lie f is

that on that date, o nly 2.4 2% of the Units had be en so ld ac cor din g to the

Sap ir A ffid avi t and if th er e was such a w ait ing list, a much hig h er

pe rcen tag e o f Units w o ul d have b een sold a t that time or sho rtly t her eaft e r.

306. The same Se p te m be r 27, 20 0 7 Da ily News a rtic le co veri ng the Se pte mb er 19,

2007 ki c ko ff gala q uot ed S ha u n Os her as sta ting that fifty co n tra c ts had been

signed so far.

a. On info rma tio n and belief, S ha un O she r told the au th or o f the arti c le that

lifty co ntra cts had been sig n ed so fa r.

h. T h is sta tem ent was false wh en it was mad e be cau se, as sw or n to in the

Sapir A ffid avi t, on S epte mb er 19, 200 7, o nly 10 U ni t c on tra c ts had be en

si gne d.

307. An Oc tob er 14, 2 0 0 7 N ew York Times ar tic le de scr ibin g the Tru mp Soho pro jec t

repo rte d Do n ald T rum p had st a ted there w ere 3,200 pu rch ase a ppl icat ion s for the

400 Units.

a. On inf o rm ati on and b eli e f, D on ald T ru m p told the au tho r o f the arti c le th at

there we re 3,200 pu rch ase app lica tion s for the 400 U ni ts to the aut hor o f

the article.

b. On in for mat ion an d belief, the a lle gati ons re gar d ing th e w ai ting list w ere

false and mi slea din g w he n the y w ere made. T he ba sis for this be lief is

that on Oc tobe r 14, 2007, only 5 .57 % o f the Units h ad b ee n so ld acc o rdi n g





to the Sapir Affidavit and if there was such a waiting list, a much higher

percentage of Units would have been sold at that time or shortly thereafter.

308. A February 12, 2008 article in The New York Observer about foreign purchasers

and the purchase of a Unit by an internationally famous soccer player stated that

Rodrigo Nino said 53% of the Units were sold.

a. This article was excerpted an d Rodrigo Nino’s statement was reprinted in

a February 13, 2008 J-fuffington Post article.

1,. This article was excerpted and Rodrigo Nino’s statement was reprinted in

a February 13, 2008 Curbed NY article.

c. On information and belief, Rodrigo Nino told the author of the article that

53% of the Units were sold.

d. This statement was false when it was made because, as sworn to in the

Sapir Affidavit, on February 12, 2008, only 12.25% of the Units had been

sold.

309. An April 11, 2008 Daily News article about Rodrigo Nino and Prodigy

International’s sales of New York condominiums units to foreign buyers, stated

that, according to Rodrigo Nino, 50% of the Trump Soho Units had been sold.

a. On information and belief, Rodrigo Nino told the author of the article that

50% of the Units were sold.



310. A September 5, 2008 Downtown Express article reporting that construction had

resumed at Trump Soho after a partial stop-work order was lifted, stated that

Complaint Page 67




Julius Schwarz, of the Bayrock Group, said the Condominium was more than half

sold.

a. On information and be1iet Julius Schwarz provided the information in the

article that the Condominium was more than half sold.


Sapir Affidavit, on September 5, 2008 only 15.25% of the Units had been

sold.

311. A January 29, 2009 New York Post article quoted Rodrigo Nino as stating that

270 Units, or about 67% of the 400 total Units have been sold.

a. On information and belief , Rodrigo Nino told the author of the article that

270 Units, or about 67% of the 400 total Units have been sold.


Sapir Affidavit, by January 29, 2009, only 62 Units, 15.5% of the total

Units, ha d been sold.

312. An April 30, 2009 The Real Deal article about condominium hotels quoted

Donald Trump Jr. as stating that the building was more than 55% sold as of the

middle of the prior month.

a. This article was excerpted and Donald Trump Jr.’s statement was

reprinted in a May 5, 2009 Curbed NY article.

b. On information and belief, Donald Trump, Jr. told the author of The Real

Deal article that the building was more than 55%.


Sapir Affidavit, on May 5, 2009, only 15.5% of the Units had been sold.

Complaint Page 68






320. As described in detail below, on intbrmation and belief, the Sponsor and other

Defendants regularly monitored reports on the Trump Soho in news stones and

publications, and demanded corrections of certain inaccurate intbrmation, but

never sought any correction of any false statements regarding sales levels or

percentages.

321. Each of the Plaintiffs was hilly justified in relying on all statements made in news

stories and publications regarding sales levels or percentages made by or

attributed to Defendants or Trump Soho representatives in deciding to enter into

their respective Purchase Agreements and make their respective Additional

Deposits.

Reliance On Defendants False Statements by Additional Purchasers

322. The Plaintiffs herein have identified a consistent pattern of false representations

regarding unit sales levels made by the Defendants and other Trump Soho sales

representatives, both in personal statements and in reports in the press, to induce

them to enter into Purchase Agreements and submit their Additional Deposits.

323. Trump Soho Unit purchasers other than Plaintiffs have reported similar false

representations regarding unit sales made to induce them to enter into Purchase

Agreements and submit Additional Deposits.

324. As such, on information and belief, Trump Soho sales representatives made false

representations to purchasers of Units at the Trump Soho other than the Plaintiffs

regarding Unit sales levels and unit availability similar in substance to the false

sales representative statements identified above, and such purchasers justifiably

relied upon such false statements.

Complaint Page 70




325. On information and belief in deciding to purchase Units and submit Additional

Deposits, purchasers of Units at the Trump Soho other than the Plaintiffs read and

justifiably relied upon news stories and publications identified above.

326. On information an d beliet in deciding to purchase Units and submit Additional

Deposits, purchasers of Units at the Trump Soho other than the Plaintiffs read and

justifiably relied upon news stories and publications, which are no t identified in

this Complaint, but which contain false representations made by the Defendants

regarding unit sales levels which are similar in substance to the news stories and

publications identified above.

327. On information and belief, had the false statements identified herein and similar

Calse statements of the Defendants not been made to and justifiably relied upon by

numerous purchasers of Units at the Trump Soho other than the Plaintiffs, such

purchasers would no t have entered into Purchase Agreements.

328. On information and belief, ha d the false statements identified herein and similar

fhlse statements of the Defendants no t been made to and justifiably relied upon by

numerous purchasers of Units at the Trump Soho other than the Plaintiffs, such

purchasers would no t have paid Additional Deposits.

329. Had any of the purchasers of Units in the Trump Soho (whether Plaintiffs or n o n

Plaintiffs) not entered into their Purchase Agreements, such Purchase Agreements

would not have been eligible to be counted among the 62 Units under contract

that were identified in the Sapir Affidavit

330. Had any of the purchasers of Units in the Trump Soho (whether Plaintiffs or n on

Plaintiffs) not paid their Additional Deposits, such purchasers’ Purchase

Complaint Page 71




Agreements would not have been eligible to be counted among the 62 Units under

contract that were identified in the Sapir Affidavit

THE MAY 5, 2010 FILING REVEALING THE FRAUD

The Minimum Sales Percentage Under the Martin Act Regulations and the Plan

331. Under the authority of the Martin Act, the Attorney General has promulgated

binding regulations (“AG Regs.”) for the offering of commercial condominium

units such as those offered at the Trump Soho. 13 NYCRR Part 20.

332. Under the A G Regs., “the offer to sell is contingent upon the [Offering] plan’s

being declared effective and upon compliance with the relevant conditions and

time periods described in the offering plan.” 13 NYCRR § 20.3(q).

333. Thus, under the AG Regs., no Trump Soho Unit sale could close until its Offering

Plan was declared effective pursuant to the AG Regs.

334. Under the AG Regs., “the plan may no t be declared effective unless bona tide

purchasers, including investors, have signed purchase agreements for at least

fifteen percent (15%) of the units offered under the plan.” 13 NYCRR §

20.3(q)(3).

335. Under the AG Regs., where a purchaser has signed a Purchase Agreement but

defaulted in making a required payment of an Additional Deposit, such Purchase

Agreement may not be counted toward the minimum 15% of units offered

required for plan effectiveness. 13 NYCRR § 20.5(e)(5)(ii)(c).

336. Under the AG Regs.: “For the purpose of computing the percentage of bona fide

purchasers of units for which purchase agreements have been executed, a

Complaint Page 72




fractional p erc ent age sha ll be ro u nd ed o ff to the nex t lo we r w h ole n um b er. ” 13

N Y C R R § 2 0. 5 (e )(4) .

337. Thus , und er the A G Regs., no T ru m p Soho Unit sale co u ld clo se until the S pon sor

had sign ed pur cha se ag ree m en ts (not the n in de fau lt) for at least 15% of the units

offered un de r the Plan.

338. Under the AG Regs., for a Plan to be de cla red eff ec ti v e, w it h exc epti ons

inap p li ca b le here, in ad diti on to m eet in g the mi nim um 15% sales p erc enta g e, an

A m end m en t to the O ffe ring P lan m us t be su bm itte d to and appr ove d by the

A tto rn ey G en era l, w h ic h A me ndm en t shall “sta te the per cen tag e o f un it s bei ng

offered for w h ich sp ons o r has acc ept ed pu rch ase agr e em ent s from b on a fide

p ur cha ser s” , and in c lud e an a ffid avi t from the Spo nso r w hic h has a “l ist of the

units w hic h are be in g co unt e d to mee t the min imu m p erc ent age th a t are nee ded

un der the terms o f th e p la n to d ecla re the pla n effe cti v e.” 13 N Y C R R § 20 .5 (e) .

339. Thus, und er the A G R egs ., no T ru m p Soho Unit sa le cou ld clo se un til an Off erin g

Plan Am en dm ent co n ta inin g an a ffi d av it dis c lo sing the nu mb er and per cen tag e o f

units w ith bon a fide p urc has e agr eem en ts ha d be en su b m itte d to an d appr ove d by

the A tto rne y G ene ral.

340. Where th e nu mb er o f un its has be en re duc ed du ri ng the co ur se o f an of feri n g, the

AG Regs. do not sp ecif y w he the r 15 % o f the o rig ina l n um ber o f un it s off ere d o r

15% o f the red u ce d nu mb er o f u ni ts o ff ered m u st ha v e sig ned p u rc h as e

ag reem en ts for the plan to be d e cl ared ef fe ct iv e .





341. The Trump Soho P lan originally offered 413 Units, if 15% of that number is

required for the Plan to become effective, a minimum of 62 signed Purchase

Agreements would be required to declare the Plan effective.

342. Further, the Offering Plan states, on page 102 that:

The Plan will no t be declared effective, at Sponsor’s option, when bonatide Agreements (including those executed by investors) have beenexecuted and are in effect with respect to no t less than 60 H otel SuiteUnits.

343. Although the Plan was amended on August [9, 2009to reduce the number of

Units offered to 391 (15% of which is 59 units), no Offering Plan amendment

changed the minimum 60 units required to declare the Plan effective contained at

page 102 of the original Plan.

344. Thus, under the AG Regs. and the Plan, no Trump Soho Unit sale could close

until the Sponsor had obtained signed Purchase Agreements (not then in default)

from bona fide purchasers for at least 60 (and possibly 62) of the Units.

345. Under the AG Regs. an offering plan is required to: “State when sponsor expects

the first closing of a unit to occur which should correspond to the first year of

operation projected in Schedule B. State that if such date is delayed twelve (12)

months or more, purchasers will be offered rescission.” 13 NYCRR §

20.3(o)( 12).

346. The Trump Soho Offering Plan specifies (on page 97) that:

if. . . the First Closing does not occur within 12 months after June [1,]2009, the date set forth in Schedule B as the commencement date for theprojected First Year of Condominium Operations, then.. . the Sponsorwill offer all Purchasers (other than Purchasers who are then in defaultunder their Agreements, if the Plan has been declared effective) the rightto rescind their Agreements. . . . Purchasers electing rescission pursuant to

Complaint Page 74




such offer will have their Deposits and any interest accrued thereonreturned.”

347. Thus, under the AG Regs. and the Offering Plan, if the Sponsor had no t obtained

signed Purchase Agreements from bona tide purchasers (not then in default) for at

least 60 (and possibly 62 ) of the Units on or before May 31, 2010, the Sponsor

would have been required to offer rescission and a full refund of all Deposits to

each of the purchasers at the Trump Soho.

348. Accordingly, under the AG Regs. and the Offering Plan, ifjust three (and possibly

just one) of the 62 actual purchasers of Trump Soho units had either not signed

their Purchase Agreements or defaulted in the payment of their Additional

Deposits on or before May 31, 2010, the Sponsor would have been required to

otfer rescission and a full refund of all Deposits to each of the purchasers at the

Trump Soho.

349. As discussed in detail throughout this Complaint, the Purchasing Plaintiffs were

induced by fraud and deceptive sales practices to enter into their Purchase

Agreements and to submit their Additional Deposits.

350. As also discussed throughout this Complaint, on information and belief additional

purchasers in the Trump Soho (other than the Purchasing Plaintiffs) were induced

by fraud and deceptive sales practices to enter into Purchase Agreements for

Trump Soho Units and to make Additional Deposits required in such Purchase

Agreements.

351. Had the Purchasing Plaintiffs had not been fraudulently and deceptively induced

to enter their Purchase Agreements and make their Additional Deposits, they

would no t have done so.

Complaint Page 75




352. On intbrmation and beliet had additional purchasers in the Trump Soho (ether

than the Purchasing Plaintiffs) not been fraudulently and deceptively induced to

enter their Purchase Agreements and make their Additional Deposits, many or

most of them would no t have done so.

353. Had the Defendants no t engaged in their fraudulent and deceptive sales practices,

by May 31, 2010, the Sponsor would have had fewer Units under Purchase

Agreements (not then in default) than the minimum 15% of total units required by

the AG Regs. a nd th e 60 Units required under the Plan, and therefore would have

been required to otTer each purchaser of a Unit the opportunity to rescind their

Purchase Agreement and obtain a full refund of their Deposits.

354. Had the Purchasing Plaintiffs been offered the opportunity to rescind their

Purchase Agreements, they each would have exercised such opportunity and

obtained a full refund of their Deposits.

The Effectiveness Amendment and the Sapir Affidavit

355. On or about April 2, 2010, the Sponsor submitted the Tenth Amendment to the

Offering Plan for the Trump Soho to the Attorney General.

356. The Tenth Amendment stated that its purpose was “to declare the Plan to be

effective and to extent the term of the offering under the Plan.”

357. Th e Attorney General accepted this Tenth Amendment for filing on May 5, 2010.

358. On information and belief, on or shortly after May 5, 2010, the Sponsor

distributed the Tenth Amendment to all unit purchasers, as required under the AG

Regs.

Complaint Page 76




359. As re qu ire d by th e AG R e gs. , the T en th Am en dm ent in c lu d ed an a ffi d av it s tati n g

the num be r o f b o na tide P u rc h as e Ag reem en ts th at w er e in e ffe ct a n d lis ti ng t he

unit n um b e rs and d a te o f e a ch su c h P ur c ha se A g re e me n t.

360. S p ec ific a lly , the Te n th A me n dm en t inc lud e d a co py of the Sap ir Af fida vit , w hi ch

is d esc ribe d abo ve an d whi ch d isc los ed th a t on ly 62 o f the Tr u m p S oh o U nits ha d

b ee n sold.

361. Pr ior to the p ub li c rel e as e o f th e Sap ir A ffi d av it on or ab o ut M ay 5, 2010, n eit her

the Sp ons or n o r any o the r D ef end ant ha d p ubl icly di sclo sed the ac tu al nu mb er of

units sold.

362. P ri o r to the pu b li c re lea se o f the Sap ir A ff idav it on o r a b ou t M ay 5, 2010, no

Trump Soho pur c ha ser w ou ld have be en ab le to d ete rm ine the ac tua l num be r o f

units sold.

363. Prior to the pu b lic re le ase of the S ap ir A ffid avi t o n or ab ou t M ay 5, 2010, no

Trump Soho pu rcha ser w ou ld ha ve bee n able to dis c ov er the fal si ty of the

Defendants’ repr ese nta tion s re ga rdin g the n um ber and p er c en tag e of T ru m p Soho

units sold d esc ribe d ab ove .

T h e D ras ti c S taf f Cu ts R e v ea le d in the T en th A me ndm en t

364. Each P u rc h ase A gre em ent exp res s ly p rov ide s th at the Pl an (d ef ined in ¶ 1 to

include all am end me nts til ed prio r to the d a te o f the P ur cha se A g re em en t) “is

in c or p or a te d her ein by re fe renc e and m ad e a pa rt h e re o f w it h th e same for ce an d

ef fec t as i f set forth her e in at length. In the e ve n t o f an y in con sis tenc y b etw een

the p ro v isi o ns o f this A gre eme nt an d the Plan, the P la n shall g ov ern .” (J 11.2)





365. Included in the Plan is a detailed budget thr the Condominium, which specifies

not only the payroll budgets by department, but also, for each department, the

exact number of employees for each job title to be hired. (Plan, pages 73-81)

366. For example, the Plan showed that the Property Operation and Maintenance

department would have 29 employees as follows: I Manager, 1 Assistant

Manager, 1 Coordinator, 8 Lead Mechanics and 18 House Mechanics. (Page 74)

367. In total, the Plan stated that the Condominium would employ a staff of213

employees.

368. Th e Plan explained the Condominium’s staffing needs and costs as follows:

The costs listed here are not anticipated to vary considerably due tochanges from time to time in the levels of hotel occupancy as these costsare considered to be the core management and service staff necessary tooperate a quality hotel of the size of the Condominium. (Page 72 )

369. Further, the Plan specified that: “The fitness center will initially be operated by

the Spa Unit Owner.” (Page 78)

370. Although a slightly revised budget was published in the Third Amendment dated

January 25 , 2008, it contained identical staffmg levels and allocations as the

staffing specified in the original Plan.

371. The Third Amendment also repeated the statement that: “The fitness center will

initially be operated by the Spa Unit Owner.”

372. Each of the Purchase Agreements at issue herein (and indeed all of the 62

Purchase Agreements listed in the Sapir Affidavit) were signed when the budgets

in the original Plan or the Third Amendment were current, and therefore the

(identical) staffing levels set out in the original Plan and the Third Amendment

Complaint Page 78




were incorporated into the Purchase Agreements and became terms and covenants

agreed to by the parties.

373. In the May 5, 2010 Tenth Amendment, issued well after each Purchase

Agreement had been signed, there was a budget that showed that the

Condominium would have drastically slashed staffing levels.

374. The staff according to the Plan and the Third Amendment of 213 was cut down by

the Tenth Amendment to a total of 159 employees, a reduction of 25.4%.

375. Th e Tenth Amendment radically reduced many departments.

376. For instance, instead of having 29 employees in the Property Operation and

Maintenance department, the Condominium would now hire only 12, 1 Manager,

1 Assistant Manager, and 10 House Mechanics, eliminating the positions of

Coordinator and Lead Mechanic entirely. (Tenth Amendment, Budget, Page 4)

377. Similarly, the Rooms department staff dropped from 70 to 48 , and the Security

staff dropped from 25 to 18. (Tenth Amendment, Budget, Pages 3 &9)

378. The three persons Florist staff was eliminated entirely, leaving no internal floral

services at the Trump Soho. (Tenth Amendment, page 1)

379. The Tenth Amendment also specifies that, rather than being operated by the Spa

Unit Owner “The Fitness Center will be operated by the Condominium and the

expenses for such are incorporated into the overall Condominium personnel and

maintenance expense budget items.” (Tenth Amendment, Budget, page 7-8)

380. Despite this change in responsibility for the operation of the Fitness Center, there

are no jobs for Fitness Center staff listed in the Tenth Amendment budget.

Complaint Page 79




381. The change in staffing reflected in the ‘l’enth Amendment, undertaking more

responsibilities with less than three-quarters of the staff, reflects a material

decrease in the leve l of services from what the Sponsor agreed to provide to the

Plaintiffs in their Purchase Agreements.

382. Such a reduction in staffing and services constitutes a material breach of each of

the Plaintiffs’ Purchase Agreements.

383. The AG Regs. specify with regard to amendments to Offering Plans that:

If there is a material amendment to the offering plan that adversely affects

the purchasers, sponsor must grant purchasers a right of rescission and areasonable period of time that is no t less than fifteen (15) days after thedate of presentation to exercise the right. Sponsor must return any depositor down payment to purchasers who rescind. 13 NYCRR § 20.5(a)(5).

384. The Plan provides (at page 177) with respect to amendments to the Plan that:

All substantive or material revisions will be contained in a duly filedamendment to the Plan. If there is a material change that adversely affectsany Purchasers, Sponsor will grant such Purchasers a right to rescind theirrespective Agreements by written notice to Sponsor given within fifteen(15) days after the date of presentation of such amendment. In such event,Sponsor will direct the Escrow Agent to return the Deposit of anyPurchasers who duly rescind their Agreement.

385. The Plan’s provision requiring the Sponsor to grant purchasers a right to rescind

their Purchase Agreements on a material adverse change was incorporated by

reference into each Purchase Agreement.

386. The decrease in Condominium staffmg set forth in the Tenth Amendment is “a

material change that adversely affects. . . Purchasers.”

Complaint Page 80




387. N eit he r in the T enth A m en dm ent n or in a n y d o cu me n t p ro v ide d to Pl a in ti ffs at or

after the tim e the Te nth Am en d me nt w as dis trib ute d did the Sp o ns o r g ran t the

Plaintiffs or oth er p ur cha sers a right to res c in d th eir P u rch a se A g re em en ts .

388. The S po n sor ’s fa ilu re to grant a righ t to re sc in d the P lain tiff s’ P u rc ha se

A gr eem en ts bas ed on the m at er ia l a dve rs e ch an g e set forth in the T ent h

A m en d m en t con stit utes a m ate ria l b re ac h o f ea ch P la in ti ff ’s P ur cha se A gre em ent .

T HE D E F E N D A N T S ’ FR AU D A ND T H E M O T IV A T IO N B E H IN D IT

T h e N e ed to P roje ct Suc ces s th rou g h F a ls e Sta tem ent s

389. To ef fec ti ve ly m ark et un its in a co n do min ium de vel o pm en t like the Trump Soho,

it is ne c ess ary to ge ner a te initial en thu s ias m for the p roj ect and cre a te a

co n tin u in g p erc e pt ion that the p ro je ct is a suc ces s.

390. This was p arti cul arly true in the case o f the T rum p Soho, w h ic h was b u rd e ne d by

co m m uni ty op pos itio n and its u niq u e Re str ictiv e D ecl arat ion lim itin g how Units

could be o cc u pi ed.

391. Dona ld T ru m p is w ell k no w n in the real es tate in d u str y and thr oug ho ut th e w or ld

for m a rke tin g his p roje cts wi th exte nsi v e hy pe and glitz.

392. The m ark etin g o f T rum p Soho fit squ a re ly in the T rum p m od e o f m ar k etm g,

having bee n in trod uce d on the 2006 fin al e o f D on a ld T rum p’s telev isi o n sh o w

The A pp ren tice , and w it h its sales h avin g b ee n k ick e d of f wi th an o pu len t g ala

ce leb rati on, as d escr ibe d in the S ept e m b er 27, 20 0 7 D ai ly Ne ws arti cle an d o the r

press reports.

C o m pl ain t Page 81




393. At the ga la. as the Daily iVc’ws rep o rte d , Donald T rum p m ade the ex tra v ag ant

claim that th er e was a 3 .2 0 0 pe rso n wa itin g list, and S h au n Os h er bo as ted that 50

co nt ra ct s had al read y been signed.

394. A lth o ug h the D e fen d an ts may have exp ect ed th a t Units w ou ld sell bri sk ly , it m ust

have q ui c kly be com e a ppa ren t to the m that sales w oul d in st ead be s lug g is h in the

extreme.

395. In lhct, th o u g h S hau n Osh er c laim ed 50 con trac ts had been si gn ed by the ti m e of

the S ep tem ber 19, 2007 gala, the Sa p ir A ff idav it sh ow s the T ru m p Soho did n ot

achieve that n u m b er o f s ig ne d co n tra cts un ti l more than six m on ths later, on

March 22, 2008.

396. In a b u ye r’s d eci s ion on w he ther to buy a co ndo mi n iu m u nit , the num be r o r

pe rce n ta ge o f u ni ts alre ady so ld by the d eve lop e r is an im po rta n t co nsi d er a tio n .

397. This is par ticu larl y tru e in a hotel co n do min ium w h ere use as a pe rso n al res ide nce

is pro h ib it ed, and the u n it is requ ir ed to be held as an in ve stm e nt pr o pe rty for th e

bulk of ev ery year.

398. As an initial m at te r, b u yer s c ons ide r ro b ust sa les to be str o ng in dic a tio n of the

dev elo p m e nt ’s v a lu e and th a t the u n its are well p rice d in the m a rk etp la ce.

399. With an unt este d co nc ep t like the T ru m p Soho an d its un iqu e Re s tri c tiv e

Covenant, the fact that a su b st an tial n um ber o f pre v io u s p u rch ase rs had e v al u ate d

and ap p ro v ed th e d eve lopm en t’s pa rtic u lar s pr o vi d es sub sta n tia l co m fo rt to la ter

purchasers.





400. More significantly, a substantial portion of the value of hotel condominium units

like the ones at the Trump Soho is bound up in the ability of the purchaser to later

resell the unit in the secondary market.

401. Where the developer cannot sell a high number and percentage of units in its

initial offering, it becomes unlikely that a viable secondary sales market will

develop.

402. On the other hand, a high number and percentage of initial unit sales is a good

indication that demand for unit resales will develop.

403. En fact, until the developer completes its initial offering and sells ou t all of its

units, the developer remains in competition with unit purchasers for unit sales.

404. Indeed the Property Report required by ILSA to be distributed to Trump Soho

purchasers expressly cautions: “Resale o t your Hotel Suite Unit may be difficult

or impossible until our projected sell-out of the condominium, since you may face

the competition of our own sales program and local real estate brokers may not be

interested in listing your Hotel Suite Unit.”

405. En addition, the higher the percentage of developer ownership in a condominium

development, the riskier the investment because of the greater chance and

consequences of Sponsor default.

406. Further, many banks will not lend on condominium units where the ownership is

more than 30 or 50 percent.

407. As a result, had the truth gotten out that the Trump Soho’s sales were in fact

anemic, selling any further units would have become nearly impossible.

Complaint Page 83




408. As de taile d belo w , eac h ot’the M isr epr e sen tin g D ef end a nt s had a su bs ta nt ia l

personal, finan cial an d re pu tati o na l in te re s t in ge n er a tin g sa le s o f Units for the

Trump Soho.

409. Each o f the in di vi du a l and co mp any sa les ag en ts , i n cl u di ng D efe nda n ts Prod igy ,

Rodrigo Nino, Core, S hau n Osher, an d T ho ma s P o st il io , and n on -pa rtie s Sara

C le ph an e , San dra D om in gu ez , M a rc e lla C arril lo , Baobab 3i, F erra n Fontal and

Jav ier C err o Diaz, are c o m p en sate d, on in for m a ti on an d b e lie f w h o lly o r in

sub sta n tia l part by c om m issio ns b ase d o n Unit sales. The basis for this

in for m at io n and be lie f is ind u str y p ract ice in the co mp ens atio n of real est at e sa les

persons.

410. Each o f the oth e r D ef e nd a nt s has, up on inf o rm ati o n and be lief a pe rs on a l

financial or e q uit y i nte res t in the T ru m p Soho and will re ce ive c om pen sat ion or

return on that interes t ba sed subs tan tial ly on the level o f Unit sales. T h e b asis for

this info rma tio n an d b e lie f is info rm a tio n reg ard ing each suc h De fen d an t set forth

abo ve an d in the O ffe ring Plan.

411. By re a so n o f th eir kn o w led g e and exp eri e nc e in th e real e sta te in dus tr y, e ach

D efen d an t knew, on inf orm ati o n and belief, tha t if the true levels o f U ni t sal es h ad

been rev eal ed, tha t it w ou ld bec o m e di ffic u lt or im p o ssi b le to ma ke further U n it

sales.


Documents

Trump Soho - Complaint pt 1, August 2010