Trump can’t secure $454 million appeal bond in New York fraud case, his lawyers say

The attorneys for Donald Trump indicated in a court filing on Monday that their client does not possess sufficient funds to obtain an appeal bond that would prevent the attorney general of New York from seizing his real estate assets in order to satisfy a civil fraud judgment of $454 million. In the filing, the attorneys for Donald Trump stated that it has been “impossible” for the former president to obtain a bond that would secure the full judgment that he is facing while he appeals the verdict that ordered him to pay it. Trump is challenging a judge’s verdict that he, the Trump Organization, and other defendants committed business fraud. The filing asks a panel of five judges from the Manhattan appeals court to allow him to avoid posting a bond while he challenges the verdict.

In the event that the request is not granted by the panel, Attorney General Letitia James may initiate the process of seizing Trump’s properties on March 25. James had previously stated that she would take that action if Trump did not either post an appeal bond or pay off the judgment. She had previously been successful in her lawsuit against Trump in this case. In the document that was submitted to the appellate division of the Manhattan Supreme Court, it is stated that Trump’s team attempted to contact approximately thirty different surety companies, but they were unable to locate any. According to a letter written by Trump’s attorney, in order to obtain a bond of that magnitude, it would be necessary to have “cash reserves approaching $1 billion,” which neither the former president nor the Trump Organization company possesses. In order to avoid James’s attempt to collect on the fraud judgment, Trump is required to post an appeal bond in accordance with the rules of the New York court.

Steven Cheung, a spokesman for the Trump campaign, issued a statement in which he said, “A bond of this size would be an abuse of the law, contradict bedrock principals of our Republic, and fundamentally undermine the rule of law in New York.” As a result of Trump and his co-defendants’ violation of a New York anti-fraud statute, Manhattan Supreme Court Judge Arthur Engoron issued an order in February requiring them to pay a total of $464 million in damages and interest. Trump, his two adult sons, the Trump Organization, and the top executives of the company were found to have fraudulently inflated the value of real estate assets for a number of years in order to increase Trump’s net worth and obtain better loan terms and other financial benefits.

Engoron’s ruling was based on this evidence. Specifically, the majority of the judgment, which is $454 million, was ordered to be paid by Trump. A daily interest rate of nearly 112,000 dollars is being accrued on Trump’s portion of the damages that were awarded to him after the judgment was handed down. A deposition that took place in the previous year revealed that Trump, who has already secured the nomination of the Republican Party for president, claimed to have “substantially in excess of $400 million in cash.” In spite of this, his attorneys filed a nearly 5,000-page court document on Monday, in which they detailed his inability to obtain a bond in order to secure the full judgment.

The filing includes an affirmation from Gary Giulietti, president of the Northeast division of the Lockton Companies, which he describes as the largest privately held insurance brokerage firm in the world. Giulietti, who was hired by Trump to help him get a bond, wrote, “Despite scouring the market, we have been unsuccessful in our effort … for the simple reason that obtaining an appeal bond for $464 million is a practical impossibility under the circumstances presented.” Only a handful of bond surety companies are approved by the Treasury Department to underwrite a bond that large, and many of those firms will only issue a single bond to a maximum of $100 million, Giulietti wrote. He also said that none of those companies will accept non-liquid assets — such as real estate — as collateral. “Simply put, a bond of this size is rarely, if ever, seen,” Giulietti wrote. “In the unusual circumstance that a bond of this size is issued, it is provided to the largest public companies in the world, not to individuals or privately held businesses.”

The Trump Organization is privately held. Giulietti wrote that it would be unattainable for a private company to obtain a bond to secure the $464 million total judgment unless it had around $1 billion in cash or cash equivalents to offer as collateral, while still being able to satisfy its other business obligations. “While it is my understanding that the Trump Organization is in a strong liquidity position, it does not have $1 billion in cash or cash equivalents,” he wrote. Trump’s attorneys also noted in the filing that bond issuers often will demand collateral totaling 120% of the judgment, which equates to over $557 million. Those issuers are also likely to demand a two-year advance on a 2% annual bond premium, which would require the defendants to pay more than $18 million upfront, the lawyers wrote.

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