Former President Trump has less than a week to secure a half billion-dollar bond or risk the seizure of his assets as he challenges a trial court’s finding that he conspired to alter his net worth for tax and insurance benefits.
A New York judge found Trump liable for fraud last year ahead of a months-long trial that ended with the judge imposing a massive $464 million penalty on the Trump Organization.
Trump’s lawyers admitted Monday that despite the former president’s “diligent efforts,” it is “impossible” for him to secure a full appeals bond in that amount due to lack of cash on hand.
Here’s what happens next as the deadline to post bond approaches.
What does Trump owe?
Republican presidential candidate former President Donald Trump speaks after voting in the Florida primary election in Palm Beach, Fla., Tuesday, March 19, 2024. (AP Photo/Wilfredo Lee)
Judge Arthur Engoron, who oversaw Trump’s civil fraud trial, ordered the former president to pay a $454 million judgment in line with penalties requested by the New York attorney general’s office, which sued Trump in 2022 over deceitful business practices.
With interest piling on an additional $112,000 each day Trump doesn’t pay, the former president now owes the state $456.8 million.
Trump’s lawyers are seeking to obtain a bond so that the enforcement of the eye-popping judgment would be automatically paused while they appeal Engoron’s ruling. But to obtain the bond, Trump must post collateral covering 120 percent of the judgment — more than $557 million, the lawyers said in a court filing.
A bond in the full amount is due March 25, the same day Trump’s hush money criminal trial was scheduled to get underway before a last-minute document dump delayed the proceeding by at least a month.
The judgment in the fraud trial comes on top of another $91 million Trump owes in a defamation case involving columnist E. Jean Carroll. Trump was able to secure a bond for that judgment, but it is unclear what collateral he put up to do so.
Does he have enough?
Former President Trump gestures to the crowd following a campaign rally March 16, 2024, in Vandalia, Ohio. (Jeff Dean, Associated Press)
In short, no. Trump’s net worth has long been obscure, with estimators such as Forbes and Bloomberg placing his wealth between $2.6 billion and $3.1 billion. But the cash he has on hand is another question.
While Trump himself told lawyers with the New York attorney general’s office last year he has “substantially in excess of $400 million in cash,” that figure falls far short of what he now owes in judgment — and must put up as a bond to stave off enforcement.
Trump’s lawyers said Monday that they’ve had trouble finding a Treasury Department-approved surety company willing to underwrite such a costly bond, a core issue being that Trump can’t put up one of his many properties as collateral.
The insurance broker they consulted, Gary Giulietti, wrote in an affidavit that a company like the Trump Organization has most of its assets invested in real estate, making obtaining an appeal bond in the judgment’s full amount “a practical impossibility.”
Trump railed in a Truth Social post Tuesday that he’d have to take extreme measures to pay the bond, such as selling some of his properties for cheap “fire sale” prices.
Will Thomas, a business law professor at the University of Michigan, said real estate certainly can be accepted in a surety bond, but it’s no surprise that lenders aren’t interested.
“No lender, insurer, anybody — they don’t want the real estate. They just want the cash,” he said. “When you’re dealing with something of this size, it’s not surprising to me that, when it comes to these really large funds, they will be very reluctant to take real estate.”
It could also spell a lack of confidence in the former president’s appeal, Thomas said.
“If you think that Donald Trump is very likely to lose most or all of his appeal, you might be reluctant to provide any kind of guarantee for him here, because you might find yourself, basically, stuck with some of his real estate and stuck with kinds of assets you don’t want,” he said.
What if he can’t find the cash?
New York Attorney General Letitia James. (AP Photo/Bebeto Matthews)
Trump has asked a higher court to accept a $100 million bond while the appeals process plays out, writing in court filings that the staggering judgment made it “impossible” to secure a bond covering the full amount. Posting a bond in the full amount would automatically halt enforcement of the penalties.
A New York appellate division judge temporarily declined to pause the judgment, but a full panel of that appeals court’s justices could reach a different determination. If the full panel allows Trump to post a smaller bond, the former president’s appeal could go forward without the judgment taking effect.
The appeals panel could issue a discretionary stay, or pause, of the judgment by March 25 to hold a hearing on the matter or find a compromise with Trump and the attorney general’s office before the clock runs out.
If the full appeals panel does not reach a compromise with Trump and no bond is posted, New York Attorney General Letitia James (D) can begin to enforce Engoron’s judgment by starting to seize Trump’s assets that include some of his most famous Manhattan properties, such as Trump Tower and 40 Wall Street.
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James has said that if Trump does not have the funds to pay off the judgment, her office intends to seek “judgment enforcement mechanisms in court.”
However, it’s unlikely James would start selling Trump’s properties off the bat to collect the judgment amount, Thomas said. While she’d be within her legal right to do so, it would be “risky and aggressive in a way that probably would not rebound to her interest,” he said.
Instead, the attorney general’s office could seize the assets in title but promise not to sell or disrupt the current business practices until the appeals process concludes, preventing damage that can’t be undone.
Other scenarios could include Trump rapidly selling off properties to reach the bond amount before Monday, filing for bankruptcy or seeking help from a wealthy third-party donor — though that could raise complications, due to his presidential bid.
“The most likely outcome, if I had to predict, is that the Court of Appeal will grant some kind of discretionary stay,” Thomas said.
“On the other hand, even if that’s the most likely path, I would say virtually every other option is bad for Trump — and they range from bad to disastrous,” he said.