Donald Trump is hurtling toward a critical deadline in his most costly legal battle to date. If the former president doesn’t come up with a financial guarantee by Monday, New York’s attorney general can start the process of collecting on the more than $454 million Trump owes the state in a civil fraud lawsuit.
Quick Read
- Trump’s legal team is fighting to halt the collection of over $454 million owed to New York in a civil fraud lawsuit.
- With a deadline looming, Trump struggles to secure a bond to cover the amount, facing rejections from over 30 underwriters.
- New York Attorney General Letitia James can initiate asset seizure processes if Trump fails to meet the financial guarantee by Monday.
- Legal experts suggest the state could potentially seize and sell Trump’s assets to enforce the judgment.
- The lawsuit accuses Trump of long-standing fraud by inflating his net worth on financial statements for business dealings.
- Trump denies wrongdoing, claiming the lawsuit and judge’s decision are politically motivated to thwart his 2024 presidential bid.
- Trump’s wealth, mainly in properties, leaves his exact cash position unclear, complicating the potential payment of the penalty.
- Trump’s social media company, Trump Media & Technology Group, could provide a financial boost if it goes public, but immediate cash access may be limited.
- Daily interest accrues on the judgment amount, adding nearly $112,000 each day, with the total owed nearing $457 million as of Tuesday.
- Trump could consider personal bankruptcy to pause judgment enforcement, a move that has never been taken by him personally, though some of his companies have declared bankruptcy in the past.
The Associated Press has the story:
Key questions as Trump hurtles toward deadline to pay $454M fraud penalty
Newslooks- NEW YORK (AP) —
Donald Trump is hurtling toward a critical deadline in his most costly legal battle to date. If the former president doesn’t come up with a financial guarantee by Monday, New York’s attorney general can start the process of collecting on the more than $454 million Trump owes the state in a civil fraud lawsuit.
Trump’s lawyers are trying to stop that from happening. They have asked a court to put collection efforts on hold while he appeals the staggering verdict.
The presumptive Republican presidential nominee tried getting a bond for the full amount, which would’ve had the dual purpose of stopping the clock on collection during his appeal and ensuring the state got its money if he were to lose.
But more than 30 underwriters said no, Trump’s lawyers told the court. They said it’s “a practical impossibility” that he’ll be able to get a bond for such a large sum.
That’s raised the possibility that New York Attorney General Letitia James could start trying to enforce the judgment as soon as Monday.
Here’s a look at what that might look like, and what it would mean for Trump’s business empire.
COULD NEW YORK REALLY SEIZE TRUMP’S ASSETS?
Yes. If Trump isn’t able to pay, the state “could levy and sell his assets, lien his real property and garnish anyone who owes him money,” Syracuse University Law Professor Gregory Germain said.
Seizing assets is a common legal tactic when a defendant can’t access enough cash to pay a civil penalty. In a famous example, O.J. Simpson’s Heisman Trophy was seized and sold at auction in 1999 to cover part of a $33.5 million wrongful death judgment against him.
Trump could avoid losing assets to seizure if he has enough cash — or can free up enough cash — to pay his penalty and mounting interest.
“If he does not have funds to pay off the judgment, then we will seek judgment enforcement mechanisms in court, and we will ask the judge to seize his assets,” James, a Democrat, said in a recent interview with ABC News.
That won’t happen immediately, though. Any effort to take control of Trump’s bank accounts, stock portfolios or properties, such as golf courses and skyscrapers, would be done through the courts, including through liens and foreclosure actions.
State officials can’t just show up with chains and padlock Trump Tower, but they can issue subpoenas requiring Trump to provide information about his finances and assets. They can then use that information to pursue taking his property and potentially selling it at auction.
WHY DOES TRUMP OWE THIS MONEY?
The state, through James’ office, sued Trump in 2022, alleging that he had committed fraud for years by inflating his wealth on financial statements given to banks and insurance companies in connection with various business deals.
Judge Arthur Engoron ruled in the state’s favor on many of the main points even before the trial began last year. In February, after a 2½-month trial, Engoron ordered Trump to pay $355 million plus interest, saying, “The frauds found here leap off the page and shock the conscience.”
Trump denies any attempt to deceive banks or anyone else about his wealth. He has said the judge’s decision and the lawsuit itself were politically motivated attempts to keep him from reclaiming the White House in the 2024 presidential election.
He has also argued that it is unfair to make him sell off assets or spend huge amounts buying a bond when the case is still being appealed.
“I DID NOTHING WRONG,” Trump said on his social media platform Tuesday. “The Corrupt Political Hacks in New York, Judge and AG, are asking me to put up massive amounts of money before I am allowed to appeal the ridiculous decision. Never done before. No jury, no victim, full disclaimer clause, happy banks.
ELECTION INTERFERENCE! WITCH HUNT!”COULD TRUMP PAY IF HE WANTED?
Trump says he is worth several billion dollars, but much of his wealth is tied up in his skyscrapers, golf courses and other properties.
He reported having about $294 million in cash or cash equivalents on his most recent publicly available financial statement, but that document is outdated, covering the fiscal year ending June 30, 2021. It’s also one of the documents that Engoron deemed fraudulent for exaggerating Trump’s wealth and the value of his assets.
Since then, Trump has netted nearly $187 million from selling the lease on his Washington, D.C., hotel and the rights to manage a New York City golf course. His current cash position is unclear. During his civil fraud trial, he said he had more than $400 million in cash, but that figure is unverified.
Trump also has other legal bills. In January, a jury ordered him to pay $83.3 million for defaming writer E. Jean Carroll after she accused him of sexual assault. Earlier this month, Trump secured a $91.6 million bond to guarantee that judgment while he appeals.
Trump’s lawyers said freeing up cash by offloading some of Trump’s properties in a “fire sale” would be impractical because such cut-rate deals would result in massive, irrecoverable losses.
ARE THERE OTHER WAYS TRUMP COULD RAISE THE MONEY?
Trump could stand to receive a financial windfall from a looming deal to put his social media company, Trump Media & Technology Group, on the stock market under the ticker symbol DJT.
A shareholder meeting is scheduled for Friday. If the deal is approved, Trump would own at least 58% of shares in the company, which runs his Truth Social platform. Depending on share price, that could be worth several billion dollars, though he might not be able to turn those stocks into cash immediately.
In the meantime, the amount Trump owes is increasing by nearly $112,000 each day due to interest. As of Tuesday, he owed the state nearly $457 million. In all, he and his co-defendants — including his company, sons Eric and Donald Trump Jr. and other executives — owe $467.4 million.
To obtain a bond, Trump’s lawyers said they would be required to post collateral covering 120% of the judgment, or about $557.5 million.
COULD TRUMP DECLARE BANKRUPTCY?
Trump could halt collection of the judgment by declaring bankruptcy.
Under federal bankruptcy law, enforcement of the judgment against Trump would be paused if he personally declared bankruptcy. However, he would still be liable to pay if just his company, the Trump Organization, or other entities were to declare bankruptcy.
Trump has repeatedly bragged about the fact that he has never, personally, declared bankruptcy, although several of his previous companies have.
“If he can’t post a bond or meet the appellate division’s bonding requirements, then I would expect him to file bankruptcy to take advantage of the automatic stay on collection,” Germain said.
“But that’s a couple of chess moves away, so we will just have to see what happens.”
