Appeals Court Slashes Trump's Bond to $175 Million in $454 Million Civil Fraud Judgment
Monday, 25 March 2024 12:36 PM EDT
A New York appeals court Monday agreed to hold off collection of former President Donald Trump's more than $454 million civil fraud judgment — if he puts up $175 million within 10 days.
If he does, it will stop the clock on collection and prevent the state from seizing the presumptive Republican presidential nominee's assets while he appeals. The appeals court also reversed other aspects of a trial judge's ruling that had barred Trump and sons Eric Trump and Donald Trump Jr. from serving in corporate leadership for several years.
In all, the order was a significant victory for the ex-president as he defends the real estate empire that vaulted him into public life.
"We will abide by the decision of the Appellate Division, and post either a bond, equivalent securities, or cash," Trump wrote in a
statement on Truth Social after the ruling. "This also shows how ridiculous and outrageous Engoron's original decision was at $450 Million.
"I did nothing wrong, and New York should never be put in a position like this again. Businesses are fleeing, violent crime is flourishing, and it is very important that this be resolved in its totality as soon as possible."
Earlier this week, Trump's lawyers pleaded for a state appeals court to halt collection, claiming it was "a practical impossibility" to get an underwriter to sign off on a bond for such a large sum.
"We are extremely pleased with the ruling issued by the Appellate Division," Trump's legal spokeswoman wrote in a statement to Newsmax. "This monumental holding reigns in Judge Engoron's verdict, which is an affront to all Americans. This is the first important step in fighting back against Letitia James and her targeted witch hunt against my client which started before she ever stepped foot in office."
The development came just before New York Attorney General Letitia James, a Democrat, was expected to initiate efforts to collect the judgment.
James' office said the judgment still stands while collection is paused.
"Donald Trump is still facing accountability for his staggering fraud. The court has already found that he engaged in years of fraud to falsely inflate his net worth and unjustly enrich himself, his family, and his organization," the office said in a statement.
The Trump attorneys had earlier proposed a $100 million bond, but an appellate judge had said no late last month.
The ruling was issued by the state's intermediate appeals court, the Appellate Division of the state's trial court, where Trump is fighting to overturn a judge's Feb. 16 finding that he lied about his wealth as he built the real estate empire that launched him to stardom and the presidency.
After James won the judgment, she didn't seek to enforce it during a legal time-out for Trump to ask the appeals court for a reprieve from paying up.
That period ended Monday, though James could have decided to allow Trump more time.
James told ABC News last month that if Trump doesn't have the money to pay, she would seek to seize his assets and was "prepared to make sure that the judgment is paid."
She didn't detail the process or specify what holdings she meant, and her office has declined more recently to discuss its plans. Meanwhile, it has filed notice of the judgment, a technical step toward potentially moving to collect.
Seizing assets is a common legal option when someone doesn't have the cash to pay a civil court penalty. In Trump's case, potential targets could include properties such as his Trump Tower penthouse, aircraft, Wall Street office building or golf courses.
The attorney general also could go after his bank and investment accounts. Trump maintained on social media on Friday that he has almost $500 million in cash but intends to use much of it on his presidential run. He has accused James and New York state Judge Arthur Engoron, who's also a Democrat, of seeking "to take the cash away so I can't use it on the campaign."
One possibility would be for James' office to go through a legal process to have local law enforcement seize properties, then seek to sell them off. But that's a complicated prospect in Trump's case, noted Stewart Sterk, a real estate law professor at Cardozo School of Law.
"Finding buyers for assets of this magnitude is something that doesn't happen overnight," he said, noting that at any ordinary auction, "the chances that people are going to be able to bid up to the true value of the property is pretty slim."
Trump's debt stems from a monthslong civil trial last fall over the state's allegations that he, his company and top executives vastly puffed up his wealth on financial statements, conning bankers and insurers who did business with him. The statements valued his penthouse for years as though it were nearly three times its actual size, for example.
Trump and his co-defendants denied any wrongdoing, saying the statements actually lowballed his fortune, came with disclaimers and weren't taken at face value by the institutions that lent to or insured him. The penthouse discrepancy, he said, was simply a mistake made by subordinates.
Engoron sided with the attorney general and ordered Trump to pay $355 million, plus interest that grows daily. Some co-defendants, including his sons and company executive vice presidents, Donald Trump Jr. and Eric Trump, were ordered to pay far smaller amounts. Monday's ruling also puts those on hold if the $175 million bond is posted.
Under New York law, filing an appeal generally doesn't hold off enforcement of a judgment. But there's an automatic pause if the person or entity posts a bond that covers what's owed.
The ex-president's lawyers have said it's impossible for him to do that. They said underwriters wanted 120% of the judgment and wouldn't accept real estate as collateral. That would mean tying up over $557 million in cash, stocks and other liquid assets, and Trump's company needs some left over to run the business, his attorneys have said.
Trump's attorneys asked an appeals court to freeze collection without his posting a bond. The attorney general's office objected.
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