Former President Donald Trump Faces Major Hurdle in Fight Against Massive Fine
Former President Donald Trump is facing a significant challenge in his battle against a massive fine imposed on him in a New York business fraud case. The fine threatens to deplete most of the cash he claims to have on hand. However, before he can proceed with his fight, he must secure a bond, which may prove to be a difficult task.
On Friday, Trump was ordered to pay approximately $355 million in penalties, along with more than $98 million in interest, after a judge found him liable for fraud in manipulating financial statements given to lenders. Each day, the accruing interest adds an additional $87,502 to Trump’s bill. In order to avoid paying the entire penalty during the expected appeal process, Trump will need to post an appeal bond. Typically, this bond is up to 120% of the judgment plus the current interest.
Based on the original ruling with interest, it is estimated that Trump will need to secure a bond worth over $540 million. However, it is unlikely that he will be able to use his properties as collateral. Neil Pedersen, owner of New York-based surety bond agency Pedersen & Sons, states that taking real estate as collateral is not very attractive. Pedersen suggests that Trump may have to liquidate some assets to secure the bond, which would also incur additional fees amounting to millions of dollars.
An appeal of Judge Arthur Engoron’s ruling could potentially take years to reach a resolution. Adding to the complexity is Trump’s status as a presidential front-runner. This situation presents an unprecedented challenge for potential bond companies. Pedersen explains that no one has ever had to enforce an indemnity agreement against a person who could potentially become the next U.S. president.
Trump has vowed to appeal Engoron’s ruling, as it not only jeopardizes his financial status but also his carefully constructed image as a wealthy business mogul. However, bond agents may have reservations about working with Trump due to his previous legal challenges regarding his business practices and claims about his wealth.
Appeal bonds are typically used to ensure that individuals ordered to pay a judgment cannot exploit the court system to delay or avoid payment. David Slarskey, a New York business attorney, raises an important question: who would be willing to commit to bonding Trump and guaranteeing payment in the event that he loses the appeal?
Although Trump claimed to have “substantially in excess of $400 million in cash” in a deposition last year, he is expected to secure a bond instead of depositing the full judgment against him, plus interest. Trump’s attorney, Alina Habba, stated that they will post a bond worth approximately $400 million within a 30-day window to file a notice of appeal. Engoron’s final judgment must be entered by a court clerk before this process can begin.
Engoron’s judgment also includes a three-year ban on Trump running a business in New York or applying for loans from state-registered financial institutions. Habba dismissed concerns about selling off Trump’s New York real estate assets, stating that they are not liquid. However, Pedersen warns that this could create its own set of challenges, especially considering the case’s focus on disputes regarding the value of Trump’s properties.
As of February, Forbes estimated Trump’s net worth to be around $2.6 billion. However, as his legal penalties continue to soar past the half-billion-dollar mark, experts like Slarskey predict that Trump may soon declare bankruptcy.
In conclusion, former President Donald Trump is facing a significant hurdle in his fight against a massive fine imposed on him in a New York business fraud case. To proceed with his appeal, he must secure a bond worth over $540 million. However, it is unlikely that he can use his properties as collateral. Trump’s status as a presidential front-runner further complicates the situation, as potential bond companies may be hesitant to commit to guaranteeing payment. Despite claiming to have substantial cash on hand, Trump’s attorney plans to secure a bond instead of depositing the full judgment against him. As his legal penalties continue to mount, there is speculation that Trump may soon declare bankruptcy.
