Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Trump loses bid to pause $454.2 million judgment in NY civil fraud case

Published 02/28/2024, 12:04 PM
Updated 02/28/2024, 05:41 PM
© Reuters. FILE PHOTO: Former U.S. President Donald Trump attends the closing arguments in the Trump Organization civil fraud trial at New York State Supreme Court in the Manhattan borough of New York City, U.S., January 11, 2024.  REUTERS/Shannon Stapleton/File Pho

By Jonathan Stempel and Luc Cohen

NEW YORK (Reuters) -Donald Trump on Wednesday lost a bid to pause a $454.2 million civil fraud judgment against him for overstating his net worth and real estate values to dupe lenders, meaning he must soon find the cash or post a bond to prevent New York authorities from seizing his property while he appeals.

The decision by Associate Justice Anil Singh of the New York Appellate Division must be affirmed by a full panel of the mid-level state appeals court. Singh granted Trump's request for a stay of a portion of Justice Arthur Engoron's Feb. 16 decision barring the former president from running any New York corporation or seeking loans from the state's banks for three years.

Trump's lawyers did not immediately respond to a request for comment on Singh's decision.

In asking for the stay earlier on Wednesday, Trump's lawyers said he is unable to post a bond for the full amount of the judgment while he appeals and wants instead to secure a $100 million bond. A bonding company would be on the hook for any payout if Trump loses his appeal and proves unable to pay.

Trump is the frontrunner for the Republican nomination to challenge Democratic President Joe Biden in the Nov. 5 U.S. election.

New York Attorney General Letitia James sued Trump, the Trump Organization and other defendants in 2022 in state court in Manhattan, accusing them of falsifying the values of Trump's properties to obtain better terms from lenders and insurers. A three-month trial over the claims ended in January.

In their filing with the Appellate Division, Trump's lawyers said a stay of Engoron's decision was needed because Trump would suffer "irreparable harm" if James were free to sell his real estate assets to raise capital to pay the judgment.

The lawyers also said the "exorbitant and punitive amount of the judgment coupled with an unlawful and unconstitutional blanket prohibition on lending transactions would make it impossible to secure and post a complete bond."

They said a $100 million bond, together with Trump's "vast" real estate holdings and ongoing oversight by a court-designated monitor for the Trump Organization, would be more than sufficient to secure the judgment.

But Singh's decision means Trump may now apply for a loan to help post a bond.

In a separate filing on Wednesday, James opposed a stay, calling it "especially inappropriate" given the defendants "all but concede" that Trump does not have enough liquid assets to satisfy the judgment.

"These are precisely the circumstances for which a full bond or deposit is necessary, where defendants' approach would leave (the attorney general's office) with substantial shortfalls once this court affirms the judgment," James wrote.

Both sides are expected to submit more written arguments in the coming weeks, and a decision could come after March 18.

RISK OF EVASION

James also said there was "substantial risk" that Trump might not pay up, or might move assets beyond her reach, if he loses his appeal. She cited the defendants' having "surreptitiously" concealed from the monitor a $40 million transfer, and Trump's recent announcement that some of his businesses had moved to Florida.

Trump has estimated his net worth in the billions of dollars, but much of that is in real estate, not cash.

© Reuters. FILE PHOTO: Former U.S. President Donald Trump attends the closing arguments in the Trump Organization civil fraud trial at New York State Supreme Court in the Manhattan borough of New York City, U.S., January 11, 2024.  REUTERS/Shannon Stapleton/File Photo

Engoron imposed a $354.9 million penalty against Trump, plus daily interest that began to accrue in 2019. The payout had grown to $454.2 million with interest by Feb. 22, and additional interest is tacked on each day.

Trump is also seeking to avoid posting a full bond during an expected appeal of last month's $83.3 million defamation verdict in favor of the writer E. Jean Carroll. He has asked the judge in that case to let him appeal without posting any security, or alternatively by posting at most a $24.5 million unsecured bond.

Latest comments

Some dumb bonding company gonna take the bullet for orange man
losers will be losers...
You are delinguent? Gotta pay you bills Diaper Donald….
Nine bananas.
This whole judgement and fine is complete bullshit. Maybe overlapped the law but this is a ridiculous judgement and amount. These people are creating a civil war.
Wah wah nobody is creating civil war you pathetic weak snowflake
He's worth billions but can't post bond, proves his wealth has been fraudulently stated.
He could liquidate some assets but the haircut might be 40 plus percent
No full bond posted put him in jail until the trial, that is what happens to other criminals when they can't make bond.
When trump has to sell, he just might trigger the CRE crash.
youve got to be kidding...
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.