Monday, April 15, 2024

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Trump’s legal woes continue as he struggles to secure $464 million bond for massive civil fraud judgment

AG Free to Seize Trump Assets in 10 Days Unless Appeals Court Halts $464M Fraud Judgment.

Judge Engoron
Dave Sanders / Pool via AP file

The legal woes of former President Donald Trump show no signs of abating, as his attorneys disclosed in a court filing today that he has been unable to secure a bond for the staggering $464 million civil fraud judgment against him. The ruling, issued by New York Judge Arthur Engoron, determined that Trump, his organization, and senior executives, including his sons Eric and Donald Trump Jr., perpetrated a prolonged and systematic scheme to mislead banks and insurance companies by grossly over-inflating assets on financial documents used to obtain loans and seal business deals.

Furthermore, it found that the Trump Organization engaged in a two-pronged strategy to defraud the government—inflating asset values when pursuing financing while simultaneously undervaluing those same assets to evade taxes. This brazen manipulation of financial records for personal gain underscores the depths of the alleged misconduct. As the full scope of the fraudulent activities comes to light, the former president faces an increasingly precarious legal landscape that threatens to ensnare him and his inner circle in a web of civil and potential criminal liability.

Trump’s lawyers argue that securing a bond for the full amount is “a practical impossibility,” despite their diligent efforts, which included approaching 30 surety companies through four separate brokers. The filing states that even after hours of negotiation with one of the world’s largest insurance companies, securing a bond for the entire judgment amount remains unattainable. And it’s likely unattainable because Trump is an untrustworthy individual who has a history of not paying what he owes.

The bond companies’ stringent requirements pose a significant challenge for Trump and his team. These companies typically demand collateral equivalent to 120% of the judgment amount, which would total about $557 million. And they only accept cash or cash equivalents, such as marketable securities, rather than hard assets like real estate. Additionally, the bond premiums, estimated at 2 percent per year with two years paid in advance, represent an upfront cost of over $18 million, which would be non-recoverable even if Trump wins his appeal.

Trump’s lawyers contend the amount of cash or cash equivalents required to collateralize the bond and maintain sufficient capital to run the business and satisfy other obligations approaches a staggering $1 billion. This assertion comes despite the filing’s claim that Trump’s real estate holdings, including iconic properties like 40 Wall Street, Doral Miami, and Mar-a-Lago, significantly exceed the judgment amount and are impossible to dispose of surreptitiously, effectively securing the plaintiff during the appeal process.

The former president’s legal team also argues the $464 million penalty is “grossly disproportional” and reiterates their trial stance that there are no victims, damages, or financial losses. They previously requested a reduction of the bond amount to $100 million, but now assert Trump should not be required to post any bond at all.

Attorney General Letitia James’ office maintains that Trump should put up the full amount, and with the 30-day automatic stay of the judgment set to expire on March 25, James will be free to seize Trump’s assets unless the appeals court intervenes. While James would not need an additional court order to begin collecting in New York, where Trump has his company and numerous real estate assets, any mortgages or debts associated with those properties could complicate the process.

Trump’s campaign spokesman, Steven Cheung, denounced the judgment as “unjust, unconstitutional, and un-American,” stating that a bond of this size would constitute an abuse of the law (which is completely untrue). Trump has asked the state Appellate Division to enter a temporary stay if they deny his request, allowing him to present his case to the state’s highest court, the Court of Appeals.

This legal battle comes on the heels of another high-profile case in which Trump was ordered to pay $83.3 million to writer E. Jean Carroll for defamation after she accused him of sexually assaulting her in the 1990s. Trump recently posted a $91 million bond to secure that judgment while he appeals the verdict.

Donald Trump’s legal troubles continue to escalate as he struggles to secure a bond for the $464 million civil fraud judgment against him and his company. The bond companies’ stringent requirements, coupled with Trump’s history of untrustworthiness and failure to pay his debts, have made it nearly impossible for him to obtain the necessary collateral.

As the 30-day automatic stay nears its expiration, Attorney General James will be free to begin seizing Trump’s assets unless the appeals court intervenes. This legal battle, along with the recent $83.3 million judgment in the E. Jean Carroll defamation case, has put Trump’s financial standing and political future under intense scrutiny. As the former president navigates these challenges, the outcome of these cases could have far-reaching implications for his ability to maintain his business empire and pursue his goal of reclaiming the White House in 2024.