Donald Trump soured on a deal, and Hong Kong partners became litigants
Donald J Trump, who has made reversing America's trade imbalance a pillar of his campaign, often portrays himself as uniquely capable of wringing concessions out of China through hard-nosed business tactics he has honed over the years.
In fact, he says, he has a personal track record to back up his boasts.
"I beat China all the time," Trump declared in a speech the day he announced his candidacy. "I own a big chunk of the Bank of America building at 1290 Avenue of the Americas that I got from China in a war. Very valuable."
Trump does have an investment in the building, an office tower near Rockefeller Centre. But court documents and interviews with people involved in the deal tell a very different story of how he ended up with it.
It began when a group of Hong Kong billionaires, including one who has been called the Donald Trump of China, helped rescue Trump from the verge of bankruptcy by investing in one of his properties in Manhattan.
For years, the carefully cultivated relationship between Trump and his Hong Kong partners proved lucrative for both sides, and stands out as perhaps the closest that Trump has come to international diplomacy.
To strike the deal, Trump had to attend elaborate dinner parties featuring foreign foods he did not want to eat. He delayed the closing because of Chinese spiritual beliefs and hunted around New York for a "feng shui" master to help with the building decor, instead of indulging his tastes for marble and gold, according to former associates of Trump who were involved in the deal.
But when his Hong Kong partners sold the property without his support, Trump waged a bitter, long-shot legal battle against them. And far from winning his share of the Bank of America building, according to court documents, he had to settle for it after losing in court. In the end, Trump's alliance and eventual rivalry with some of Hong Kong's richest men proved to be a tale of Trump at the extremes. It showcased his unflagging confidence in his ability to turn a bad financial situation around. But it also underscored his willingness to destroy a fruitful relationship with aggressive litigation.
Their partnership began in 1994, after the collapse of the real estate market left Trump deeply in debt. He could not afford to make the bank payments on a 77-acre swath of land near Lincoln Centre known as Riverside South, let alone to develop the property.
In need of cash, he agreed to meet with intermediaries from a consortium of Hong Kong billionaires who were willing to buy the land, assume Trump's debts and pay him 30 per cent of the profits, as well as fees for helping to manage the development of the site, which they agreed to finance. It was by far the best offer he received. The group included Henry Cheng Kar-shun, one of the world's richest developers, and Vincent Lo, who is Trump's Chinese counterpart in more ways than one.
Like Trump, Vincent Lo comes from a wealthy family. He is well known for creating a hip restaurant area in Shanghai called Xintiandi, or "new heaven on earth," an upscale brand he has replicated across China. His life has been chronicled by tabloids and society pages, especially his divorce from his first wife and his marriage to a beauty pageant winner, Miss Hong Kong of 1977.
Despite their similarities, Trump hesitated when he received an invitation to travel to Hong Kong to negotiate the deal. He does not like to travel, and he feared that negotiating on the Hong Kong developers' turf would put him at a disadvantage and make him appear weak, said Abe Wallach, Trump's executive vice-president of acquisitions and finance at the time.
But face-to-face meetings are crucial in Chinese business culture, where personal bonds and political connections, collectively known as guanxi, are relied upon to avoid and resolve business disputes, sometimes more than the legal system. Eventually, Trump's aides convinced him that he had to make the trip.
In Hong Kong, the golf games, dinner parties and intensive talks featured the awkwardness and cultural miscues that can crop up in any high-stakes international negotiation. Lo and Cheng invited Trump to play golf, but Trump was appalled when they told him they usually bet more than $1,000 on each hole. They ended up betting $100 per hole, and Trump wound up losing more than he won, Lo recalled in an interview this month.
"He's a good golfer, but we had the local knowledge - he probably was jet-lagged," Lo said.
Lo and Cheng invited Trump to dinner at the home of Cheng's father, an uncommon honour in Chinese culture. But the evening was a trying experience for Trump.
"He didn't like the food, and couldn't use chopsticks," recalled Wallach, who was there. "The first course was a whole fish, with the head still on. You could see the face of the fish and the teeth, which really looked grotesque. The servant put the fish in front of Donald. Donald said, 'The honour belongs to Abe.' I took my chopsticks and began to pick at it."
Cheng and Lo also half-jokingly proposed an informal drinking contest, which Trump, a teet-o-taler, declined.
The Hong Kong partners were wary of Trump's well-earned reputation for litigiousness. But for more than a decade, Trump avoided conflict with them. Indeed, he often deferred to them. Chase Manhattan Bank, which held Trump's mortgage, initially scheduled the closing of the deal during China's Ghost Month, during which some believe the spirits of the dead roam the earth.
"The Chinese told me that we would have to wait until after the fifteenth of September to close the deal," Wallach wrote in a chapter of an unpublished book he is writing about his years with Trump. "Trump went apoplectic." But he said that Trump went along.
(Lo said that any delay had been caused by a need to complete paperwork, and that he and his business partners were not superstitious.)
The project proved extremely profitable, as the New York real estate market rebounded. In 2005, the Hong Kong partners sold the development for $1.76 billion. Although it was believed to be the largest residential real estate transaction in the city's history, Trump was furious, and contends to this day that his partners did not consult him first.
"I said: 'Why didn't you come talk to me? Whatever price you got, I could have gotten more money,'" Trump recalled in an interview this month.
Lo said that Trump had been informed of the decision, and that in any case it would have been very hard to shop such a large property around without Trump's becoming aware of it.
Read More.
In fact, he says, he has a personal track record to back up his boasts.
"I beat China all the time," Trump declared in a speech the day he announced his candidacy. "I own a big chunk of the Bank of America building at 1290 Avenue of the Americas that I got from China in a war. Very valuable."
Trump does have an investment in the building, an office tower near Rockefeller Centre. But court documents and interviews with people involved in the deal tell a very different story of how he ended up with it.
It began when a group of Hong Kong billionaires, including one who has been called the Donald Trump of China, helped rescue Trump from the verge of bankruptcy by investing in one of his properties in Manhattan.
For years, the carefully cultivated relationship between Trump and his Hong Kong partners proved lucrative for both sides, and stands out as perhaps the closest that Trump has come to international diplomacy.
To strike the deal, Trump had to attend elaborate dinner parties featuring foreign foods he did not want to eat. He delayed the closing because of Chinese spiritual beliefs and hunted around New York for a "feng shui" master to help with the building decor, instead of indulging his tastes for marble and gold, according to former associates of Trump who were involved in the deal.
But when his Hong Kong partners sold the property without his support, Trump waged a bitter, long-shot legal battle against them. And far from winning his share of the Bank of America building, according to court documents, he had to settle for it after losing in court. In the end, Trump's alliance and eventual rivalry with some of Hong Kong's richest men proved to be a tale of Trump at the extremes. It showcased his unflagging confidence in his ability to turn a bad financial situation around. But it also underscored his willingness to destroy a fruitful relationship with aggressive litigation.
Their partnership began in 1994, after the collapse of the real estate market left Trump deeply in debt. He could not afford to make the bank payments on a 77-acre swath of land near Lincoln Centre known as Riverside South, let alone to develop the property.
In need of cash, he agreed to meet with intermediaries from a consortium of Hong Kong billionaires who were willing to buy the land, assume Trump's debts and pay him 30 per cent of the profits, as well as fees for helping to manage the development of the site, which they agreed to finance. It was by far the best offer he received. The group included Henry Cheng Kar-shun, one of the world's richest developers, and Vincent Lo, who is Trump's Chinese counterpart in more ways than one.
Like Trump, Vincent Lo comes from a wealthy family. He is well known for creating a hip restaurant area in Shanghai called Xintiandi, or "new heaven on earth," an upscale brand he has replicated across China. His life has been chronicled by tabloids and society pages, especially his divorce from his first wife and his marriage to a beauty pageant winner, Miss Hong Kong of 1977.
Despite their similarities, Trump hesitated when he received an invitation to travel to Hong Kong to negotiate the deal. He does not like to travel, and he feared that negotiating on the Hong Kong developers' turf would put him at a disadvantage and make him appear weak, said Abe Wallach, Trump's executive vice-president of acquisitions and finance at the time.
But face-to-face meetings are crucial in Chinese business culture, where personal bonds and political connections, collectively known as guanxi, are relied upon to avoid and resolve business disputes, sometimes more than the legal system. Eventually, Trump's aides convinced him that he had to make the trip.
In Hong Kong, the golf games, dinner parties and intensive talks featured the awkwardness and cultural miscues that can crop up in any high-stakes international negotiation. Lo and Cheng invited Trump to play golf, but Trump was appalled when they told him they usually bet more than $1,000 on each hole. They ended up betting $100 per hole, and Trump wound up losing more than he won, Lo recalled in an interview this month.
"He's a good golfer, but we had the local knowledge - he probably was jet-lagged," Lo said.
Lo and Cheng invited Trump to dinner at the home of Cheng's father, an uncommon honour in Chinese culture. But the evening was a trying experience for Trump.
"He didn't like the food, and couldn't use chopsticks," recalled Wallach, who was there. "The first course was a whole fish, with the head still on. You could see the face of the fish and the teeth, which really looked grotesque. The servant put the fish in front of Donald. Donald said, 'The honour belongs to Abe.' I took my chopsticks and began to pick at it."
Cheng and Lo also half-jokingly proposed an informal drinking contest, which Trump, a teet-o-taler, declined.
The Hong Kong partners were wary of Trump's well-earned reputation for litigiousness. But for more than a decade, Trump avoided conflict with them. Indeed, he often deferred to them. Chase Manhattan Bank, which held Trump's mortgage, initially scheduled the closing of the deal during China's Ghost Month, during which some believe the spirits of the dead roam the earth.
"The Chinese told me that we would have to wait until after the fifteenth of September to close the deal," Wallach wrote in a chapter of an unpublished book he is writing about his years with Trump. "Trump went apoplectic." But he said that Trump went along.
(Lo said that any delay had been caused by a need to complete paperwork, and that he and his business partners were not superstitious.)
The project proved extremely profitable, as the New York real estate market rebounded. In 2005, the Hong Kong partners sold the development for $1.76 billion. Although it was believed to be the largest residential real estate transaction in the city's history, Trump was furious, and contends to this day that his partners did not consult him first.
"I said: 'Why didn't you come talk to me? Whatever price you got, I could have gotten more money,'" Trump recalled in an interview this month.
Lo said that Trump had been informed of the decision, and that in any case it would have been very hard to shop such a large property around without Trump's becoming aware of it.
Read More.
No comments:
Post a Comment
Have something to say?????