The developer of the Trump Ocean Club in Panama City, the tallest building in Central America, has filed for Chapter 11 bankruptcy protection in New York as it attempts to restructure $220 million in bond payments.
Newland International Properties Corp. reportedly missed a $31.9 million amortization payment in 2011, according to media reports. In the filing, Newland blamed slow sales in the wake of the financial crisis and rising construction costs for the financial difficulties
"The sale of units in the Trump Ocean Club has been particularly impacted as the financial losses suffered by affluent customers during the economic crises have adversely affected second-home and resort purchases," Newland chief operating officer Carlos A. Saravia said in the filing.
Newland's $220 million in bonds, issued in 2007, were trading last month at 70.5 cents on the dollar, Bloomberg reports
The Trump Ocean Club, which was completed in 2011, is the first project bearing the Trump name to open outside the United States. The Trump Organization was not involved in building the project; Newland licensed the Trump name.
The Trump Organization has sold the Trump name for several projects around the world with mixed success. Several projects failed, resulting in lawsuits against the developer and Trump. Earlier this year Trump announced plans to open a hotel in Uruguay.
The 70-story Trump Ocean Club features 630 residential apartments and 369 hotel condominium units, in addition to retail and office space.
In January, Newland said it had reached a tentative agreement with creditors to restructure the bond payments. Newland reportedly offered stakeholders a three-year extension on the notes. (The bankruputcy is related only to the bonds, not the developer.)
The agreement "may include the use of a pre-negotiated and pre-packaged Chapter 11 process under New York law" to expedite the restructuring, according to an e-mailed statement from Newland today.
The creditors had until April 30 to approve the deal. The company has received support from 62 percent of the note holders, Bloomberg reports. But that was apparently not enough to stave off the bankruptcy filing.