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Trump faces business litigation that could cost $40 million

There is often a fine line regarding what justifies a business litigation suit. A lawsuit charges that real estate tycoon Donald Trump crossed that line by scamming aspiring real estate investors into buying into a hoax in a recent California case. Simply put, Trump is accused of deceitfully leading students attending the unlicensed university bearing his name to believe that its teachers were selected by the mogul and reality star himself. That is just one of the causes for this business litigation case.

An application has been made to have the case against Trump University and its directors designated as a class action lawsuit in a federal court in California. This business dispute stems from the plaintiffs' belief that Trump intentionally misrepresented the program as one designed to lead them to financial independence. To the contrary, it is claimed that the university only offers free courses to gain initial interest, and then capitalizes on programs costing around $10,000 and mentorship programs with exorbitant costs of approximately $35,000.

Trump denies any allegations of manipulating or defrauding students. He points to the fact that the school has an approval rating of over 100 percent. Nonetheless, a petition originally filed in New York has made its way to the California federal courts and students are pursuing $40 million dollars in restitution. The petition in this business litigation case asserts that Trump and former president of Trump University LLC functioned illegitimately until the name was changed to Trump Entrepreneur Initiative in May 2010, despite being told of the improper characterization as a university by New York state officials in 2004.

Although the outcome of this case is uncertain, California consumers and businesses clearly must keep a keen eye for cases of similar nature. This is certainly not the first time a well-known financial mogul has allegedly attempted to use his reputation to exploit consumers. Bernie Madoff and Martha Stewart are just a couple of recent cases that come to mind, though Trump is clearly entitled to his day in court to defend his name and his actions. It is worth examining the possibility of business litigation if one believes they have been defrauded or misled, regardless of the reputation of the business or business owner.

Source: USA Today, Trump faces two-front legal fight over 'university', Kevin McCoy, Aug. 26, 2013

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