Donald Trump, following a civil fraud case loss in New York last month, faces a significant hurdle: posting a bond nearing half-a-billion dollars to halt New York Attorney General Letitia James (D) from seizing his assets while he appeals. Unless Trump meets this requirement by Monday, James is prepared to initiate asset collection.
In February, Judge Arthur F. Engoron ruled against Trump, his two eldest sons, and two executives, concluding they provided false information to lenders and insurers to secure favorable deals. Engoron mandated a payment of $464 million, a sum that escalates daily by over $100,000. In the aftermath of this judgment, Trump’s legal options have considerably narrowed.
Trump’s legal team has petitioned appellate judges to alleviate, postpone, or waive the bond condition. However, the appeals court has yet to make a definitive ruling.
Despite efforts, Trump’s attorneys encountered obstacles securing a bond from 30 insurance firms, as they declined real estate — Trump’s primary asset — as collateral. Liquidating assets like golf courses or hotels typically requires more time than is available to him now.
Trump, who has vocally criticized Engoron’s ruling and James on social media, faces limited and largely undesirable prospects. Experts outline several scenarios that could unfold in the coming days.
Nothing happens immediately
The appeals court typically releases decisions on Tuesdays and Thursdays, leaving little room for action on Trump’s request to waive the bond requirement by Monday. In the absence of a ruling and Trump’s failure to post a bond, legal experts suggest New York Attorney General Letitia James may authorize the New York City sheriffs or city marshals to commence asset seizure.
However, James might delay action for strategic reasons. There’s a possibility that Trump could receive some form of relief from the appeals court. Initiating asset seizure before the court’s ruling could necessitate retraction later on, posing a risk to James’s position. Additionally, James may be mindful of public perception, seeking to avoid accusations of undue aggression or unfairness. As Nikos Passas, a criminology professor at Northeastern University, noted, she aims to navigate the situation without appearing overly aggressive or unjust.
Letitia James moves to enforce
James has been unequivocal about her intentions to pursue Trump’s assets if he fails to meet the judgment. In a statement to ABC News, she affirmed her office’s commitment to seeking judgment enforcement mechanisms in court and pursuing asset seizure if necessary. Specifically mentioning Trump’s 40 Wall Street office building, James highlighted her intent to target properties associated with him.
Legal experts anticipate that James would prioritize seizing New York properties, particularly those held by LLCs implicated in the fraud case, such as 40 Wall Street and the Seven Springs estate in Westchester County. Engoron’s judgment has already been filed with a court in Westchester County, paving the way for potential seizure of the Seven Springs property.
Stewart Sterk, a professor of property and real estate law at Cardozo School of Law, explained that James could utilize judgment liens to foreclose on properties and compel their sale to satisfy the judgment. This strategy would likely initiate an unprecedented confrontation between James and Trump.
In her pursuit, James could employ various tactics, including issuing subpoenas to gather information about Trump’s assets, deploying New York City marshals to seize bank accounts, scheduling property auctions, and filing liens against assets in other states. Adam Pollock, a former assistant attorney general in New York, suggested that James could pursue multiple avenues simultaneously to ensure she recovers the full amount owed, potentially targeting several properties of her choosing.
Trump finds the money
Trump could potentially seek assistance from affluent individuals willing to lend him money to meet the bond requirement. However, Trump’s strained relationships with banks limit his ability to secure traditional bonds using real estate as collateral, which poses a significant challenge.
While Trump’s stake in Truth Social’s parent company is valued at around $3 billion, a lockup agreement prevents him from selling his shares for six months. Although he could request a waiver from the board to sell shares, such a move might negatively impact the stock price. Additionally, borrowing against his shares could be complicated by the lockup provision.
In a recent post on Truth Social, Trump claimed to have “almost five hundred million dollars in cash,” contradicting his lawyers’ argument regarding his lack of liquidity. Trump’s lawyer, Christopher Kise, clarified that the cash Trump referred to was accumulated from his business ventures worldwide, which is being targeted by Letitia James and the Democrats.
If Trump manages to secure a bond, Barbara Jones, the court-appointed monitor overseeing his business and finances, will have oversight over the deal. Engoron’s recent order stipulates that Jones must be informed of any efforts to secure bonds, including details about personal guarantees and obligations required by the bonding company from the Trump Organization.
The appeals court steps in
The New York Supreme Court Appellate Division holds the key to Trump’s potential escape from his current legal entanglement. Trump’s legal team has petitioned the court to either reduce, delay, or waive the bond requirement altogether. A favorable decision from the court could exempt Trump from posting a bond until the conclusion of his appeal process or allow him to post a smaller bond amount. Despite a previous denial of a request for an emergency $100 million bond by an appeals judge, Trump’s attorneys are now awaiting a ruling from a full panel of judges.
Sterk, the legal expert, suggests that the court might grant Trump’s request to halt James from seizing his assets until after his appeal against Engoron’s judgment is heard. If James proceeds to sell Trump’s properties prematurely, Sterk notes that the damage could be irreversible since Trump wouldn’t be able to reclaim them even if he won the appeal. Courts must carefully weigh the potential irreversible consequences of their decisions.
In the event that the appellate division does not intervene to prevent James from seizing assets, Trump’s legal team has indicated their intention to escalate the matter to the Court of Appeals, the highest court in the state. However, such a move would require permission from the appellate division.
Trump files for bankruptcy
Filing for bankruptcy could provide a temporary reprieve for Trump by delaying the need to post a bond immediately. While it wouldn’t absolve him of his debt to the court, the accruing interest would persist. However, filing for bankruptcy would prioritize New York alongside other creditors, necessitating a request to a bankruptcy judge for payment.
Despite the potential benefits in buying time, filing for bankruptcy could carry significant political consequences for Trump, who has cultivated an image of being a shrewd and successful businessman. Sources close to Trump have indicated that he is not currently considering this option, although he has utilized it in the past. With limited alternatives available, bankruptcy remains one of the few remaining options for Trump to navigate his legal challenges.