Trump Fraud Judgment: Ex-President Says Posting Full $454 Million Bond Is ‘Not Possible’ As Deadline Looms Mar 18, 2024
https://www.forbes.com/sites/alisondurkee/2024/03/18/trump-fraud-judgment-ex-president-says-posting-full-454-million-bond-is-not-possible-as-deadline-looms/?sh=65bacca16d3c
TOPLINE
Former President Donald Trump is unable to secure a bond for the more than $454 million he owes as part of the civil fraud case against him and his company, the ex-president’s attorneys said Monday, as Trump asks a state appeals court to pause the judgment against him days before it comes due.
KEY FACTS
Trump has been ordered to pay $454.2 million in the civil fraud case, in which he and his business associates were found liable for fraudulently misstating the value of their assets on financial statements for personal gain.
That amount continues to grow by more than $111,000 each day until it’s paid off, based on a 9% annual interest rate, and Trump is still required to either pay cash into a court-controlled account or post an appeals bond while he appeals the case.
Trump’s attorneys asked the court to pause the judgment while the case is appealed in a filing Monday, saying that securing a bond for the full amount is a “practical impossibility.”
The attorneys argued Trump has undertaken “diligent efforts” to secure a bond and negotiated with “one of the largest insurance companies in the world,” but that’s proven “‘obtaining an appeal bond in the full amount’ of the Judgment is not possible under the circumstances presented.’”
Most bonding companies won’t consider a bond as large as what Trump needs, and those that do won’t accept real estate as collateral, Trump’s lawyers said.
Given interest rates and premiums, Trump would have to turn over approximately $557 million in cash or cash equivalents (like marketable securities) to secure a bond, according to his lawyers.
BIG NUMBER
30. That’s the number of surety companies that Trump has unsuccessfully approached about his appeals bond, according to an affirmation filed in court by Trump Organization lawyer Alan Garten. None were willing to accept real estate as collateral.
WHAT TO WATCH FOR
It’s unclear when the appeals court could rule on Trump’s request to pause the monetary judgment. The former president has previously asked the court to let him only post a $100 million bond, if it doesn’t halt the judgment entirely. Though there’s no deadline specified in New York law on Trump posting a bond, the New York Attorney General’s office, which brought the case, is expected to start trying to enforce the judgment if he hasn’t paid by March 25. Attorney General Letitia James has previously said she plans to seize Trump’s buildings if he doesn’t pay.
FORBES VALUATION
Forbes estimates Trump’s net worth at $2.6 billion—but only $413 million is made up of cash and liquid assets, meaning the judgment against Trump is more money than he has in the bank.
HOW WILL TRUMP PAY?
It remains to be seen how Trump will pay the judgment against him or secure a bond if the appeals court rules against him, whether that’s borrowing against his properties, getting a wealthy friend to help him put up the cash or obtaining a loan. The former president’s lawyers have previously said in court filings that Trump will have to sell his properties if the court doesn’t pause the judgment. In Monday’s filing, attorneys noted that raising the money for a bond “through a ‘fire sale’ of real estate holdings would inevitably result in massive, irrecoverable losses.”
TANGENT
Trump’s scramble to secure a bond in the fraud case comes after the ex-president separately posted a $91.6 million bond earlier in March as part of writer E. Jean Carroll’s defamation case against him. That bond was underwritten by The Chubb Group, which defended its business with Trump to customers, claiming it has “nothing to do with the underlying merits or with favoring any of the parties” and that the company supports the rule of law. It is still unclear how Trump secured that bond, though Chubb CEO Evan Greenberg said it was “fully collateralized.”
KEY BACKGROUND
James sued Trump and his business associates—including his sons—for fraud in 2022, accusing them of fraudulently misstating the value of assets on financial statements more than 200 times between 2011 and 2021.
The attorney general alleged the valuations were misstated in order to obtain more favorable business deals, and obtain a higher net worth for Trump. While the ex-president and his co-defendants have argued their valuations were correct and were subjective figures based on Trump’s real estate expertise, Judge Arthur Engoron ruled against Trump even before the trial in the case began, finding the numbers were fraudulently inflated.
A monthslong trial then took place on other allegations, such as whether the fraud was committed knowingly, and Engoron ruled against Trump and his co-defendants in February. The judge found there was “overwhelming evidence” suggesting Trump and his sons signed off on financial statements knowing the figures were false, rejecting the defendants’ claims that the company’s accountants were responsible for any issues with the numbers. In addition to the monetary judgment against Trump, Engoron also ordered Trump’s sons Eric and Donald Trump Jr. to pay approximately $4 million each and for former CFO Allen Weisselberg to pay $1 million.
He also barred Trump and his sons from leading New York companies for three and two years, respectively, and barred Trump from obtaining loans through companies registered in New York, though an appeals court later put that part of the judgment on hold.
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