What Trump’s Court-Ordered ‘Corporate Death Penalty’ Means For Trump Org. Properties
Along with a go-ahead for a New York civil case against former U.S. President Donald Trump, New York state Supreme Court Judge Arthur Engoron also delivered a decision that could mean the end of the road for The Trump Organization’s real estate businesses.
In addition to allowing state Attorney General Letitia James’ case against Trump to proceed, Engoron’s decision Tuesday revoked licenses that The Trump Organization and other companies owned by his children used to do business in the state. The judge ordered a receiver to be appointed to oversee the dissolution of some of those businesses, The Wall Street Journal reported.
The decision amounts to “New York's corporate death penalty,” Joyce Vance, a professor at the University of Alabama School of Law and a former U.S. attorney, wrote on X, formerly Twitter.
Lawyers for the former president asked the judge for clarity Wednesday, saying the decision’s implications for properties including Trump Tower — held by one of the businesses owned by The Trump Organization — are unclear.
“Are they going to be sold or managed under the direction of the receiver?” Trump lawyer Chris Kise asked at a pretrial hearing Wednesday, adding that Engoron’s decision could affect as many as 500 business entities, the WSJ reported.
Engoron said he would take the matter up at a later date but wasn’t prepared to rule immediately. He told both the AG’s office and Trump’s lawyers to choose a receiver to consult with him.
The questions over the fate of Trump’s properties are some of the wide-reaching consequences of James’ civil suit against the former president, filed in September 2022. The attorney general alleges that Trump inflated his annual net worth by as much as $3.6B between 2011 and 2021 in order to secure loans and insurance deals at favorable rates. Trump is also accused of misvaluing assets in order to lower property tax bills.
Among the New York properties that may be affected by the decision is the infamous Trump Tower triplex, with its gold-coated walls and lavish marble surfaces, Newsweek reported. A nearby luxury residential property known as Trump Park Avenue and a luxury apartment building at 40 Wall St. in Manhattan’s Financial District may also be implicated.
Even assets outside of New York City might go into receivership due to the order, including a Westchester County estate, Mar-a-Lago in Florida and even Trump’s Scotland golf course.
The judge’s decision alone damages the values of any properties because it signals they were already overvalued, William Black, a white-collar criminologist, corporate fraud investigator and University of Minnesota Law School scholar in residence for financial regulation, told The Guardian.
“The most likely thing, if you get an honest agent or receiver, they’re going to sell the properties at a loss,” he said. “In finance, once the dominoes start falling, it becomes basically impossible to save it.”
In the meantime, legal experts say Trump will still own the buildings, but losing control of the business entities means there is very little he will be able to do with them.
“Without a corporate charter, you can't operate as a corporation. You can't get loans, you can't apply for a government contract,” Diana Florence, a former Manhattan prosecutor specializing in financial crimes, told Business Insider. “It's comparable to once a person dies. A dead person can't sell property. Only the executor of the estate can do that — or in this case, the receiver.”