The New York Attorney General may start collecting Trump assets if he fails to post a bond by next Monday, a leading real estate lawyer has said.
Paul Golden, author of Litigating Constructive Trusts and a partner at New York law firm Coffey Modica, told Newsweek that either Trump or a bond company must file a motion by Monday stating they have a $175 million bond in place.
"Presumably, if the motion fails, the Attorney General will take the position that the bond is without effect and that the Attorney General may start to take collection efforts," Golden said.
"Of course, if for whatever reason a court rules the bond is without effect, then Trump would likely appeal that decision as well, and possibly seek a stay in the context of that separate appeal too," he said.
Trump posted the $175 million bond on April 1 to prevent James from seizing his assets while he attempts to appeal the civil fraud ruling against him. New York Judge Arthur Engoron previously found Trump, his adult sons Donald Jr. and Eric, and The Trump Organization liable for a scheme in which the value of Trump's net worth and assets were unlawfully inflated to obtain more favorable business deals. Trump, the presumptive 2024 GOP presidential nominee, has maintained his innocence in the matter.
Trump was hit with a penalty that came to around $454 million after interest and would have had to pay a bond slightly higher than that amount to stave off the state from seizing assets, such as his many real estate holdings, to cover the penalty. An appeals court later ruled that he could instead pay a lower bond of $175 million.
The bond was then rejected by the court's filing system shortly after it was posted due to missing paperwork, including a "current financial statement." James, whose office led the fraud case against Trump, later raised questions about the "sufficiency" of the bond and noted that the surety backing it, Knight Specialty Insurance Company (KSIC), is not admitted in New York, meaning it's ineligible to obtain a certificate of qualification from the Department of Financial Services. KSIC has refiled its paperwork as a result in an effort to get the process moving again.
Newsweek sought email comment from Knight Specialty Insurance and Trump's attorney on Tuesday.
Golden said James cited a statute "which indicates that within ten days (that is—by April 15, as April 14 is a Sunday) either Trump or the KNIC must file a motion in court to 'justify the surety.' If not, then pursuant to statute, the bond shall 'be without effect'."
Golden said it is difficult to read how the situation will play out.
"There is little case law on this particular subject, so it becomes hard to predict what factors a court would consider when deciding if KNIC was truly solvent, and could ultimately afford to pay off $175 million," he said.
Engoran has already scheduled an in-person hearing in this case for April 22, 2024, in the courtroom at 10 a.m.
"The official court records do not seem to indicate what precisely will occur on that date, but news reports indicate that Hon. Engoran will be discussing bond issues," Golden said.
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Sean O'Driscoll is a Newsweek Senior Crime and Courts Reporter based in Ireland. His focus is reporting on U.S. law. ... Read more
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