A New York judge has issued a punishing blow to former President Donald Trump's business empire, potentially delivering what some are calling the "corporate death penalty."
Judge Arthur Engoron on Tuesday ruled Trump liable for fraud while partially granting New York Attorney General Letitia James' motion for a summary judgment in her $250 million lawsuit against the former president. Trump's motion for a summary dismissal was denied, while members of his legal team were hit with sanctions.
Engoron also ordered the cancellation of business licenses for The Trump Organization and several other New York entities associated with the ex-president, effectively crippling or ending their ability to operate in the state. The judge went on to order that the parties recommend independent receivers to oversee the dissolution of the businesses.
The order concerning dissolution was referred to as the "corporate death penalty" by several legal experts on social media, including former federal prosecutor Joyce Vance, former Defense Department Special Counsel Ryan Goodman and former Trump impeachment counsel Norm Eisen.
The language in Engoron's ruling is somewhat ambiguous as it does not explicitly order that Trump's businesses be dissolved—instead calling for the naming of receivers who would oversee any dissolution.
"Taken on its face, the plain meaning of the conclusions at the end of this 35-page order by Judge Engoron is that he seems to be ordering the dissolution of The Trump Organization," former federal prosecutor Glenn Kirschner said during an MSNBC appearance shortly after the ruling was handed down.
In addition to Trump and his businesses, Tuesday's ruling also applies to the former president's adult sons Donald Trump Jr. and Eric Trump, as well as former Trump Organization executives Allen Weisselberg and Jeffrey McConney.
Engoron further ruled that retired Judge Barbara Jones would oversee the finances of The Trump Organization, pending any further rulings.
The judge did not rule on all aspects of James' suit, which accuses the former president and his co-defendants of misrepresenting business assets to obtain favorable loans and tax benefits. The trial is set to begin October 2, although lawyers for Trump have asked for a delay.
Newsweek reached out for comment to the Trump Organization via email on Tuesday.
Trump lawyer Alina Habba vowed that the former president would appeal what she called a "flawed" ruling in a statement emailed to Newsweek on Tuesday night.
"Today's decision is fundamentally flawed at every level," Habba said. "It is important to remember that the Trump Organization is an American success story. The fact that this Court summarily found that there is no question of fact, finding in part that Mar-a-Lago is worth approximately $20 million and issue a decision of this magnitude is an affront to our legal system."
"We intend to immediately appeal this decision because President Trump and his family, like every American business owner, is entitled to their day in court," she added.
If Trump's companies are forced to dissolve, the ex-president's business empire would not necessarily cease to exist entirely. Engoron's decisions only apply to Trump's named businesses in New York, leaving room for the possibility that operations for the impacted companies could be moved to other states.
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Aila Slisco is a Newsweek night reporter based in New York. Her focus is on reporting national politics, where she ... Read more
