Home Business Trump New York fraud bond cut to $175 million in appeal from $454 million

Trump New York fraud bond cut to $175 million in appeal from $454 million

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Former US President Donald Trump attends a hearing to determine the date of his trial for allegedly covering up hush money payments linked to extramarital affairs, at Manhattan Criminal Court in New York City on March 25, 2024. 

Justin Lane | Afp | Getty Images

A New York appeals court on Monday paused for 10 days a massive civil fraud judgment against former President Donald Trump, and sharply reduced to $175 million the bond amount he would have to post to obtain a longer stay of that damage award.

The ruling came the same day that New York Attorney General Letitia James would have been allowed to start seizing Trump’s real estate and bank accounts to satisfy the $454 million-and-rising business fraud judgment in the case.

The order by the five-judge appeals courts panel prevents James from doing so, for now.

Trump’s lawyers, who had previously suggested that the bond be set at $100 million, in a court filing last week said that it was “impossible” for him to get an appeal bond of $454 million after having approached more than 30 surety companies without success.

Trump’s two adults sons, his company the Trump Organization and two executives who all were co-defendants in the case owe a total of about $10 million in additional damages.

None of the surety companies were willing to write a bond without Trump posting cash or some other liquid asset, the attorneys wrote in their filing with the Manhattan Supreme Court appellate division panel.

Because of the size of the fraud judgment, the companies insisted that Trump show “cash reserves approaching $1 billion,” according to his lawyers. But neither Trump nor the Trump Organization company has that amount of cash on hand, the filing said.

In its order Monday, the appeals court stayed trial Judge Arthur Enfgoron’s decision that had barred Trump from serving as an officer or director of a New York company for three years, and that had barred him and the corporate defendants from applying for loans from New York lenders for the same period. The order also stayed Engoron’s judge’s ruling that had barred Trump’s sons, Donald Trump Jr. and Eric Trump, from serving as officers and directors of New York companies for two years.

But the appeals court panel rejected a request to block enforcement of Engoron’s order extending and enhancing the role of a financial watchdog the judge had installed to monitor the Trump Organization’s finances.

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The fraud judgment stems from a lawsuit filed by James against Trump, his two adult sons, the Trump Organization and two executives.

Engoron, who conducted a bench trial for the suit, in February ruled against the Trump defendants, saying they had submitted “blatantly false financial data” to boost Trump’s financial statements and obtain better terms on loans.

Trump has condemned the verdict, the judge, and James, saying he is the victim of a politically motivated attack designed to harm his chances of defeating President Joe Biden in November’s election.

More than a week ago, Trump obtained a $91.6 million appeal bond from a subsidiary of the Chubb insurance company to secure a Manhattan federal civil court defamation judgment against him in favor of E. Jean Carroll, a writer who had accused him of rape.

That bond, which was collateralized by a brokerage account of Trump’s, will keep Carroll from collecting on a judgment of more than $83 million from Trump while his appeal is pending.

Chubb had discussed issuing Trump a second bond, for his fraud case, and initially was willing to consider a mix of liquid assets and real property as collateral, according to Alan Garten, an attorney for the Trump Organization.

But Chubb backed out of those talks last week, Garten said in the court filing Monday. Chubb’s exit came after it was publicly revealed that Trump obtained his bond in Carroll’s case from the company.

Chubb CEO Evan Greenberg last week wrote a letter to investors, customers, and brokers who had raised concerns about the Carroll-related bond.

“When Chubb issues an appeal bond, it isn’t making judgments about the claims, even when the claims involve alleged reprehensible conduct,” Greenberg wrote.

“As the surety, we don’t take sides,” he said.

“It would be wrong for us to do so and we are in no way supporting the defendant. We are supporting and are part of the justice system plumbing included in this case.”

This is breaking news. Please check back for updates.

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