Accueil PolitiqueAmérique United States | Trump lawyers: Securing full $454 million bond “practical impossibility” in NY fraud case

United States | Trump lawyers: Securing full $454 million bond “practical impossibility” in NY fraud case

Former President Trump’s lawyers indicated in a court filing Monday that he is unable to secure the full $464 million bond due in his New York fraud case, an endeavor one insurance broker called “a practical impossibility.”

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With the Hill

Attorneys for Trump and his co-defendants in the case said in a filing with the state’s intermediate appeals court it was “impossible” for them to secure the full amount for an appeal bond.

“Defendants’ ongoing diligent efforts have proven that a bond in the judgment’s full amount is ‘a practical impossibility,’” the lawyers wrote, citing an affidavit signed by an insurance broker who testified for Trump during the trial last year. Trump’s attorneys claim they have spent “countless hours negotiating with one of the largest insurance companies in the world” and have approached 30 companies to back the bond, efforts they said they were pursuing before the judgment was made.

“The amount of the judgment, with interest, exceeds $464 million, and very few bonding companies will consider a bond of anything approaching that magnitude,”

Trump’s lawyers wrote.

Trump was ordered to pay a staggering total of $454 million earlier this year in a verdict issued by Judge Arthur Engoron. Trump is currently appealing the judgment, but the total amount will continue to gain interest while that process plays out.

Part of the issue, Trump’s lawyers claim, is that the former president is unable to put up property for collateral as part of the bond, due to the massive sum. Trump’s lawyers argued that there are only a “handful” of surety companies that are approved by the Treasury Department to underwrite a bond as high as this one, noting that many have internal policies that they will only issue a bond of up to $100 million.

In addition, Trump’s team argued that none of the sureties will accept hard assets, such as real estate, as collateral and will only accept cash or cash equivalents. They noted that the reasoning behind this is that the surety companies are not in the business of managing properties and are not willing to “take the risk” of needing to sell off real estate quickly if a claim is made under the bond. 

The companies also won’t generally accept property as a collateral because reinsurers are “unwilling” to take up a bond such as this, the lawyers wrote. They also maintained that this high of a bond is “rarely seen,” arguing that these amounts are typically issued to the largest public companies in the world and not individuals and private businesses such as Trump’s. The attorneys also claim that a company even with billions of dollars in real estate assets would need cash or cash equivalents of up to $1 billion to pay for the bond, which it doesn’t have.

“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,”

the lawyers wrote.

“As a result, for a company such as The Trump Organization, which has most of its assets invested in real estate, obtaining a bond for $464 million is a practical impossibility,”

they added.

The filing Monday comes after a federal judge signed off on Trump’s $91 million bond in a separate civil defamation case with writer E. Jean Carroll last week. Unlike the New York fraud case, Trump was able to have an insurance company underwrite his bond in that case and could likely use property as collateral.

Court documents indicate the major insurance company Chubb underwrote Trump’s bond in the Carroll case, but it is unclear what cash or collateral the former president was required to put down. Trump’s finances have taken a hit between the two civil cases over the past month. In addition, the Save America leadership Pac spent nearly $3 million on legal consulting in January alone as he is entangled in numerous court battles, according filings with the Federal Election Commission last month. 

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