Former President Donald Trump has until Monday to post a bond covering a $454 million civil fraud judgment or face the risk of New York state seizing some of his marquee properties. The judgment stems from a February 16 ruling by Judge Arthur Engoron, who found that the real estate developer had overstated the value of his assets. Trump was ordered to pay the money he gained from providing false information in financial statements to deceive lenders and insurers. This amount must be paid to temporarily halt enforcement of the judgment while Trump appeals Engoron’s ruling.
Will Trump be able to pay?
On March 18, Trump’s legal team stated in a court filing that obtaining an appeal bond covering the full amount of the judgment was not feasible due to the rejection of their requests by over 30 bond companies. They explained that securing a bond for such a significant sum of money, totaling $557 million, would require them to gather collateral worth the same amount.
Trump has consistently denied any wrongdoing in the case, attributing it to political motivations, especially as he pursues a potential third run for the US presidency.
In a post on Truth Social, Trump asserted that he possesses nearly $500 million in cash, which he would prefer to allocate towards his presidential endeavors rather than addressing the fraud judgment.
This figure marks an increase from Trump’s previous financial disclosures. In June 2021, a statement submitted to the court revealed that he had $293.8 million in cash and cash equivalents at that time.
Financial disclosure forms filed with the federal government in August shed light on Trump’s diverse income sources. In 2022, he reported revenue of at least $537 million from golf courses and hotels, $30.4 million in licensing fees and royalties, $26.5 million in management fees, and $61.1 million in distributions from his stake in various buildings, including 1290 Avenue of the Americas in New York City.
Additionally, Trump earned $6.2 million from speaking engagements and received $116,103 in pension payments from the Screen Actors Guild and the American Federation of Television and Radio Artists. Furthermore, he reported $268.7 million in proceeds from a Washington, DC, hotel sale, along with nearly $1 million from the sale of two helicopters.
Trump’s extensive real estate holdings, including properties such as the Trump Tower in Manhattan and the Mar-a-Lago resort in Palm Beach, Florida, were valued at $4.3 billion in June 2021. Despite owing a total of $439.2 million in loans and other liabilities at the time, his net worth was estimated at $4.5 billion.
His major properties, including golf clubs and club facilities, New York buildings like Trump Tower and Trump Plaza, as well as stakes in jointly owned buildings with Vornado, contributed significantly to his overall worth.
Following the merger of his social media company, Truth Social, which went public on Friday, Trump’s net worth is expected to increase by $3 billion. However, converting this asset into cash in the next six months may pose challenges due to restrictions outlined in the merger agreement.
Earlier this month, Trump posted a $91.6 million bond to cover an $83.3 million defamation verdict awarded to writer E. Jean Carroll. She sued him after he publicly dismissed her accusation of rape, denying any wrongdoing in the matter.
What are Trump’s alternatives?
The former president could potentially opt to declare personal bankruptcy, a move that could temporarily halt the enforcement of the judgment. However, it’s crucial to note that even if his company, the Trump Organization, or other entities were to declare bankruptcy, Trump himself would remain personally liable.
Despite several of his companies having filed for bankruptcy in the past, Trump has often boasted that he has never personally declared bankruptcy.
Gregory Germain, a law professor at Syracuse University, speculated that if Trump fails to post the required bond or meet the appellate division’s bonding requirements, he may resort to filing for bankruptcy to benefit from the automatic stay on collection proceedings. This legal maneuver could offer him a temporary reprieve from the judgment’s enforcement.
What happens next?
Trump, a Republican, retains several potential avenues to address the situation. He could petition an appeals court to request an extension or reduction of the bond. Alternatively, he might explore options to secure funds from alternative sources or consider selling off some of his properties, although the latter appears improbable.
Meanwhile, New York Attorney General Letitia James, a Democrat, has affirmed her intention to pursue the seizure of Trump’s assets if he fails to meet the deadline. James initiated the civil fraud lawsuit against Trump in September 2022.
Under New York state jurisdiction, officials possess the authority to enforce measures such as levying and selling his assets, placing liens on his real property, and garnishing payments owed to him, as outlined by Germain to AP.
Nevertheless, immediate asset seizure is unlikely, as any collection attempts would likely involve legal procedures such as liens and foreclosures. However, the state could initiate preparatory actions, including issuing subpoenas to Trump for asset-related information.
In the interim, James may opt for interim measures, such as freezing assets or imposing restrictions on Trump’s utilization of his bank accounts.
