Justice Department lawyers representing President Trump Donald John TrumpBubba Wallace to be driver of Michael Jordan, Denny Hamlin NASCAR team Graham: GOP will confirm Trump's Supreme Court nominee before the election Southwest Airlines, unions call for six-month extension of government aid MORE say the Trump Organization's decision to walk away from its Trump SoHo hotel supports the argument for dismissing a lawsuit alleging the president is in violation of the Emoluments Clause of the Constitution.

In a letter to U.S. District Judge George Daniels in Manhattan, N.Y., on Friday, the Justice Department said that the exit from the SoHo location "undermines" a lawsuit from competing hotels and restaurants and watchdog groups arguing that Trump's business empire, including his hotels, amount to an illegal receipt of money from foreign governments, Reuters reported.

“This development undermines the hospitality plaintiffs’ reliance on alleged competition with the Trump SoHo to demonstrate standing,” the letter reportedly reads.

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The lawsuit claims that Trump is in violation of the Emoluments Clause, which prohibits elected leaders from receiving gifts or benefits from foreign officials, because he retains ownership of his businesses while in the White House.

Trump has passed control of day-to-day operations of the company to his two elder sons, Donald Trump Jr. and Eric Trump. Still, he has long faced criticism for not fully divesting from his business empire after he took office in January, particularly his hotel in Washington, D.C.

The Justice Department has countered that the plaintiffs in the lawsuit cannot prove damages from the allegations.