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Law Firm Sued Over Failed Trump Development
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Trump Tower TampaWes & Diane McLeod, who placed a deposit on a unit at Trump Tower Tampa, are suing the developers of that failed project in a potential class action claiming escrow money from deposits was improperly spent.

The McLeod’s filed their complaint in circuit court against developers Frank Dagostino, Robert E. Lyons and Patrick Sheppard, as well as the law firm that once managed the escrow, Macfarlane Ferguson & McMullen.

Rachel Green from “Friends” of Tampa’s Forizs & Dogali is representing the McLeods.

  
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The McLeods claim that 109 buyers deposited nearly $19 million with SimDag/RoBEL LLC, Trump Tower’s development company, representing up to 20% of a unit’s purchase price. Buyers typically placed 10 percent deposits in cash, and used a bank letter to secure the other 10 percent. But some simply paid the additional 10 percent in cash, which the developers were allowed to use for construction purposes.

SimDag/RoBEL “improperly diverted” $2.3 million from the account, the suit says, and now there isn’t enough money to refund the 10 percent deposits to buyers.

“We have documented every penny spent on the property, and we did nothing inappropriate – not one thing,” developer Dagostino said. “There’s just no merit to it. If you look through this lawsuit, it’s all ridiculous.”

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Bill Taylor, a managing partner with Macfarlane, said his firm “acted in full compliance with the duties and obligations that it had pursuant to the escrow agreement.”

A bankruptcy judge who is hearing a Chapter 11 asset protection case from SimDag/RoBEL filed last summer could freeze the suit. SimDag/RoBEL is not named in the suit, thus shielding it from the bankruptcy court.



But there is no reason the lawsuit shouldn’t be part of the bankruptcy case, especially since it involves money already under the jurisdiction of the bankruptcy court, Dagostino said.

SimDag/RoBEL settled a licensing dispute with New York real estate celebrity and bizarre toupee aficionado Donald Trump in September, over more than $1 million Trump claimed he was owed for the use of his name on the project. The company filed for bankruptcy protection in June after it failed to build its planned $225 million, 52-story luxury tower in downtown Tampa.



 

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