Former President Donald Trump could find out Monday how New York state aims to collect over $457 million he owes in his civil business fraud case, even as he appeals the verdict that led to the gargantuan debt. After state Attorney General Letitia James won the judgment, she didn’t seek to enforce it during a legal time-out for Trump to ask an appeals court for a reprieve from paying up.
Quick Read
- Debt Collection from Trump: Former President Donald Trump may learn how New York plans to collect the $457 million he owes from a civil business fraud case, even as he appeals the verdict.
- Attorney General’s Stance: Attorney General Letitia James, having secured the judgment, initially allowed Trump a grace period to appeal without enforcing payment. The period ends Monday, with potential for extension.
- Appeal and Bond Issues: Trump seeks to delay payment during his appeal without posting the full bond amount, but courts have so far required it. This poses a significant financial burden, conflicting with his campaign funding plans.
- Asset Seizure Possibilities: James could target Trump’s significant assets, including real estate and bank accounts, if he cannot pay the penalty. Trump claims to have ample cash, but aims to allocate much of it to his presidential campaign.
- Legal and Logistical Challenges: Seizing and selling off Trump’s high-value assets would be complex and time-consuming, raising questions about achieving fair market value through such processes.
- Background of the Case: The debt arises from a trial finding Trump and his executives inflated his wealth on financial statements, misleading banks and insurers. Trump denies wrongdoing, attributing discrepancies to mistakes by subordinates.
- Enforcement of Judgment: New York law typically requires a bond to delay judgment enforcement during an appeal, but Trump’s team argues the financial requirements are prohibitive, impacting his ability to conduct business.
- Legal Developments: Trump’s request for a collection freeze without a bond is pending in court, opposed by the attorney general’s office, highlighting the ongoing legal battle and its implications for Trump’s financial and political activities.
The Associated Press has the story:
Trump could learn Monday how NY wants to collect $457M owed in his civil fraud case
Newslooks- NEW YORK (AP) —
Former President Donald Trump could find out Monday how New York state aims to collect over $457 million he owes in his civil business fraud case, even as he appeals the verdict that led to the gargantuan debt. After state Attorney General Letitia James won the judgment, she didn’t seek to enforce it during a legal time-out for Trump to ask an appeals court for a reprieve from paying up.
That period ends Monday, though James could decide to allow Trump more time. The presumptive Republican presidential nominee has been trying to avoid having to post a bond for the entire sum in order to hold off collection while he appeals, but courts so far have said no.
James, a Democrat, told ABC News last month that if Trump doesn’t have the money to pay, she would seek to seize his assets and was “prepared to make sure that the judgment is paid.”
She didn’t detail the process or specify what holdings she meant, and her office has declined more recently to discuss its plans. Meanwhile, it has filed notice of the judgment, a technical step toward potentially moving to collect.
Seizing assets is a common legal option when someone doesn’t have the cash to pay a civil court penalty. In Trump’s case, potential targets could include such properties as his Trump Tower penthouse, aircraft, Wall Street office building or golf courses.
The attorney general also could go after his bank and investment accounts. Trump maintained on social media Friday that he has almost $500 million in cash but intends to use much of it on his presidential run. He has accused James and New York state Judge Arthur Engoron, both Democrats, of seeking “to take the cash away so I can’t use it on the campaign.”
One possibility would be for James’ office to go through a legal process to have local law enforcement seize properties, then seek to sell them off. But that’s a complicated prospect in Trump’s case, notes Stewart Sterk, a real estate law professor at Cardozo School of Law.
“Finding buyers for assets of this magnitude is something that doesn’t happen overnight,” he said, noting that at any ordinary auction, “the chances that people are going to be able to bid up to the true value of the property is pretty slim.”
Trump’s debt stems from a months-long civil trial last fall over the state’s allegations that he, his company and top executives vastly puffed up his wealth on financial statements, conning bankers and insurers who did business with him. The statements valued his penthouse for years as though it were nearly three times its actual size, for example.
Trump and his co-defendants denied any wrongdoing, saying the statements actually lowballed his fortune, came with disclaimers and weren’t taken at face value by the institutions that lent to or insured him. The penthouse discrepancy, he said, was simply a mistake made by subordinates.
Engoron sided with the attorney general and ordered Trump to pay $355 million, plus interest that grows daily. Some co-defendants, including his sons and company executive vice presidents, Donald Trump Jr. and Eric Trump, were ordered to pay far smaller amounts.
Under New York law, filing an appeal generally doesn’t hold off enforcement of a judgment. But there’s an automatic pause if the person or entity posts a bond that covers what’s owed.
The ex-president’s lawyers have said it’s impossible for him to do that. They said underwriters wanted 120% of the judgment and wouldn’t accept real estate as collateral. That would mean tying up over $557 million in cash, stocks and other liquid assets, and Trump’s company needs some left over to run the business, his attorneys have said.
Trump’s attorneys have asked an appeals court to freeze collection without his posting a bond. The attorney general’s office has objected.
