Morris Manning & Martin, LLP

“Bad Boy” Clause Potentially Bad News for The Trump Organization

12.14.2022

If the Trump Organization, recently convicted of tax fraud, has “Bad Boy” clauses in its loan agreements, it may have more troubles ahead. Lenders could demand full payment – or even force properties into foreclosure. The commonly-used clause is designed to protect lenders if the borrower knowingly does something wrong. Bisnow examines the issue, including whether the fraud conviction could trigger the carve-out. MMM’s Betsy Karmin, a partner in the Real Estate and Finance Practices, analyzes how likely lenders may – or may not be – to invoke the clause. 

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