Former United States President Donald Trump has until Monday to post a bond covering a $454m civil fraud judgement or face the risk of New York state seizing some of his marquee properties.
In a February 16 ruling, Judge Arthur Engoron found the real estate developer had overstated the value of his assets. Trump was ordered to pay the money he gained from lying in financial statements to dupe lenders and insurers.
This amount needs to be paid to pause enforcement of the judgement while Trump appeals Engoron’s judgement.
Will Trump be able to pay?
On March 18, Trump’s lawyers wrote in a court filing that “obtaining an appeal bond in the full amount” of the judgement “is not possible under the circumstances presented” because getting a bond for such a large sum of money is “a practical impossibility”. More than 30 bond companies rejected their entreaties, they said. The lawyers said posting the bond would require them to gather collateral worth $557m.
Trump has denied any wrongdoing and called the case politically motivated as he runs for the US presidency a third time.
In a Truth Social post on Friday, Trump said he has nearly $500m in cash that he would much rather spend on his presidential run than the fraud judgement.
That number has gone up from Trump’s previous disclosures. In June 2021, a statement of financial condition that Trump submitted to the court showed he had $293.8m in cash and cash equivalents at the time.
Trump has a variety of sources of income, financial disclosure forms filed with the federal government in August show.
In 2022, Trump reported at least $537m in revenues related to golf courses and hotels, $30.4m in licensing fees and royalties, $26.5m of management fees and $61.1m in distributions from his stake in buildings such as 1290 Avenue of the Americas in New York City.
Trump also made $6.2m from speaking engagements and $116,103 in pension payments from the Screen Actors Guild and the American Federation of Television and Radio Artists. In addition, he reported $268.7m in proceeds from a Washington, DC, hotel, including a gain on the sale of the property, and nearly $1m from the sale of two helicopters.
Trump owns hotels, office buildings, residential buildings, golf courses and estates. According to a June 2021 financial statement, Trump’s properties – including New York City office building 40 Wall Street, the Trump Tower in Manhattan and the Mar-a-Lago resort in Palm Beach, Florida – were worth $4.3bn at the time while Trump owed a total of $439.2m in loans and other liabilities. It said his net worth was $4.5bn.
Among his major properties, the document said golf clubs and other club facilities were worth $1.76bn, New York buildings such as Trump Tower and Trump Plaza were worth $524.7m and $33.4m, and his stakes in two buildings jointly owned with Vornado were worth $645.6m.
Trump’s worth is set to rise after his social media company, Truth Social, became a public company on Friday after a merger. Trump owns more than 60 percent of the company, which will bolster his net worth by $3bn. However, it would be difficult for Trump to turn this into cash for the next six months due to restrictions in the merger agreement.
Trump this month posted a $91.6m bond to cover an $83.3m defamation verdict for writer E Jean Carroll while he appeals. She sued him after Trump called her a liar for accusing him of raping her decades ago. He has denied wrongdoing.
What are Trump’s alternatives?
The former president could personally declare bankruptcy, which could pause enforcement of the judgement. However, he would still be personally liable if just his company, the Trump Organization, or other entities were to declare bankruptcy.
Trump has repeatedly bragged that he has never personally declared bankruptcy although several of his companies have.
“If he can’t post a bond or meet the appellate division’s bonding requirements, then I would expect him to file bankruptcy to take advantage of the automatic stay on collection,” Syracuse University Law Professor Gregory Germain told The Associated Press news agency.
What happens next?
Trump, a Republican, could approach an appeals court to seek an extension or lessening of the bond. He could also seek cash from elsewhere or sell some properties, which is considered unlikely.
New York Attorney General Letitia James, a Democrat, has said she will seek to seize some of Trump’s assets if he fails to meet the deadline. James originally brought the civil fraud lawsuit against him in September 2022.
New York state officials can actually “levy and sell his assets, lien his real property and garnish anyone who owes him money”, Germain told AP.
However, this is not going to happen immediately. Any attempt to collect would be done through such legal actions as liens and foreclosures. However, the state could lay the groundwork for doing so by subpoenaing Trump for information about his assets.
James could likely take more short-term measures, such as freezing or imposing restrictions on how Trump uses his bank accounts.
Source
:
Al Jazeera and news agencies
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