Trump faces 'insurmountable difficulties' in securing $464M bond in civil fraud case, his attorneys say
Former President Donald Trump is facing "insurmountable difficulties" in obtaining a bond to satisfy the $464 million civil fraud judgment, his attorneys said Monday in a new appellate court filing, and the magnitude of which would require him to use real estate as collateral.
Judge Arthur Engoron in February ordered Trump to pay $464 million in disgorgement and interest after holding him liable for doing a decade's worth of business with fraudulent financial statements that overvalued his real estate holdings and hyped his wealth. Trump was also barred from leading any New York company for three years. His sons Donald Trump Jr. and Eric Trump were also fined $4 million apiece and barred for two years.
"Defendants have faced what have proven to be insurmountable difficulties in obtaining an appeal bond for the full $464 million," according to an affirmation by Trump Organization general counsel Alan Garten.
While Garten said Trump is "financially stable" and maintains "substantial assets," the magnitude of the judgment would require him to use his real estate as collateral for the bond. So far, according to Garten's affirmation, no surety bond provider approached by Trump is willing to accept real estate as collateral, including Chubb, the insurance giant underwriting Trump's $91.6 million bond to cover the $83 million judgment in the E. Jean Carroll defamation case, plus interest.
"For Defendants, this presents a major obstacle," Garten wrote.
Trump's attorneys, who have called the judgment "unconstitutionally excessive," asked an appellate court again on Monday to allow Trump to secure a bond in a lesser amount.
"Obtaining such cash through a 'fire sale' of real estate holdings would inevitably result in massive, irrecoverable losses -- textbook irreparable injury," defense lawyers Alina Habba and Clifford Robert wrote.
According to the filing, Gary Guilietti -- the president of insurance surety Lockton Companies who testified in Trump's defense at trial -- has helped coordinate the Trump Organization's outreach to bond companies. Guilietti said in an affidavit that surety companies have not allowed the Trump Organization to use its properties as collateral, leaving the company with the only option of posting 120% of the bond in the form of cash and cash equivalents, totaling $557,491,716.
"While it is my understanding that the Trump Organization is in a strong liquidity position, it does not have $1 billion in cash or cash equivalents," Guilietti wrote.
The New York Attorney General's Office has objected to a lesser bond, arguing Trump and his co-defendants "will attempt to evade enforcement of the judgment or to make enforcement more difficult."
The former president has denied all wrongdoing and has said he will appeal.
Engoron ordered Trump to pay pre-judgment interest on each ill-gotten gain -- with interest accruing based on the date of each transaction -- as well as a 9% post-judgment interest rate once the court enters the judgment in the case.
University of Michigan business law professor Will Thomas previously told ABC News the interest not only adds to Trump's mounting legal bills but will likely also guide the former president's approach to his appeal.
Trump will continue to accrue interest on the fine during his lengthy appeal of Engoron's ruling, unless he deposits the full amount of the fine into an escrow account, according to Thomas.
While Trump's appeal will prompt an automatic stay of the enforcement of Engoron's ruling, Trump needs to first put money into an escrow account or post a bond in order to appeal.
If Trump decides to post a bond to cover the fine during his appeal, the interest will continue to accrue during his appeal, adding potentially tens of millions of dollars in the process.
