The New York attorney general may start seizing Donald Trump's assets if he fails to post a $175 million bond on Monday.
Trump posted a $175 million bond on April 1 to prevent Attorney General Letitia James from seizing his assets while he appeals a civil fraud judgment against him, but this was rejected by a New York court.
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 on Monday, April 15.
He said that it comes after James objected to deficiencies in a bond Trump previously filed.
"The online records for the case indicate that on April 1, Trump filed a bond and specifically indicated that if the Trump defendants are ultimately obligated to pay a judgment, then the Knight Specialty Insurance Company [KSIC] can cover the sum—up to $175 million."
"Trump provided this bond as a means of avoiding the Attorney General's collection efforts pending the full resolution of the appeal—which may take many months or longer," Golden said.
"Three days later, on April 4, the Attorney General filed what is called a Notice Of Exception To Surety. The Attorney General noted that there was no certificate of qualification."
The statute the attorney general cited outlines how New York can issue a certificate of qualification indicating that "the insurer is solvent, responsible and otherwise qualified to make policies or contracts of the kind required."
"Presumably, the Attorney General determined that no certificate of qualification exists," Golden said.
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.
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.
Golden said that Trump or KSIC will have to file a motion in court on Monday to show that they have the $175 million in place.
"Unless another insurer can be found, then likely Trump or KSIC will indeed file a motion in court, attempting to prove that KSIC does have sufficient assets," Golden said.
"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.
However, Trump could seek a stay while he yet again tries to amend the bond, Golden added.
"Trump may ask either the lower court or the appellate court (or both) to provide him with a new temporary stay, and an extension of time to find a new bonding company that is more likely to pass muster," he said.
Newsweek sought email comment from Knight Specialty Insurance and Trump's attorney on Monday.
Golden said that the 10-day deadline ended on Sunday, when the courts are closed, and can therefore continue on to Monday.
Monday is a major day for Trump. It is also the start of his Stormy Daniels hush money case—the first time in U.S. history that a former president has gone on criminal trial.
The prosecution will try to prove that, before the 2016 presidential election, Trump paid, or discussed paying, two women—adult film star Daniels and former Playboy model Karen McDougal—not to reveal his alleged affairs with them. He is also accused of making payments to a former Trump Tower doorman who claimed to know that Trump allegedly fathered a child with another woman.
Trump has pleaded not guilty to all charges and denies the affairs took place.
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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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