Lawyers for Donald Trump said in a filing Monday that the former president can't post the bond needed to appeal a $454M civil fraud judgment against him.
:quality(75))
The Trump Organization has not been able to get a surety company to accept its properties as collateral to pay the full bond amount, according to a legal reply filed in New York appeals court Monday.
Securing a surety bond for nearly a half-billion dollars is “impossible under the circumstances,” Gary Giulietti, the president of the Northeast region for insurance brokerage Lockton, said in a sworn affidavit submitted to the court by Trump’s lawyers.
Giulietti was tapped by The Trump Organization to secure the bond and has spent the past few weeks in discussions with large insurers. None of them, he wrote, will accept real estate as collateral.
Trump must pay the money in cash or post the bond to appeal the verdict handed down last month by New York Supreme Court Judge Arthur Engoron in a fraud case brought by state Attorney General Letitia James. Most insurers require a surety bond to cover 120% of a verdict, Giulietti wrote, which would mean Trump could have to pay more than $557M.
“Even when it comes to publicly traded companies, courts routinely waive or reduce the bond amount,” Trump's attorneys wrote in asking the appeals court to stay the judgment, describing the bond requirement as “unprecedented for a private company.”
Because Trump's companies' holdings are primarily in real estate, his attorneys wrote that forcing him to liquidate those assets to generate the cash for the judgment would cause irreparable harm.
Engoron’s judgment banned Trump’s businesses from securing a loan from any bank with business in New York, an element that Trump’s lawyers said at the time would make it more difficult to pay the fines. The New York Times previously reported that Trump had access to $350M in cash and liquid investments as of last year.
Following Engoron's verdict on Feb. 16, James said that her office would not hesitate to seize Trump's properties if the former president did not pay the bond. The original deadline for payment of the bond was within 30 days of the verdict, with an appeals court rejecting Trump's plea for a stay on the judgment at the end of February.
The $454M amount is made up of $355M in penalties plus 9% interest. Engoron found that The Trump Organization routinely inflated property values to get favorable loan terms while simultaneously reporting lower values to reduce property taxes.
The judgment also banned Trump from working as an officer or director of any company doing business in New York for three years, plus a two-year ban on the same duties for sons Donald Trump Jr. and Eric Trump, who were also fined over $4M each.
If Trump's request for a stay is denied and he is unable to post the requisite cash or bond, he could be found in contempt of court.
CORRECTION, MARCH 18, 5:30 P.M. ET: A previous version of this story misstated the amount of the verdict against Trump. This story has been updated.
)
)
)
)
)
)
)
)
)
)
)
)