Trump can’t secure bond for $454 million civil-fraud judgment

Donald Trump says suretors won’t accept real estate as collateral and require $1bn cash to guarantee the bond; if he can’t raise it, NY’s Attorney-General will look to seize his assets.

Donald Trump speaks during a Buckeye Values PAC Rally in Vandalia, Ohio, on March 16, 2024. Picture: AFP.

Donald Trump is facing having some of his assets seized as soon as next week after his lawyers said he couldn’t obtain a bond to guarantee payment of a $US454 million penalty against him in New York business fraud case, despite canvassing 30 suretors around the world.

In a filing to a New York appeals court on Monday (Tuesday AEDT), Trump said that the judgment, ordered by a state judge last month, was so large that suretors wouldn’t accept real estate as collateral and would require cash to guarantee the bond.

“Defendants’ ongoing diligent efforts have proven that a bond in the judgment’s full amount is ‘a practical impossibility’,” his lawyers wrote.

A private company like the Trump Organisation would need $US1bn in cash to obtain the bond and to continue to operate, an amount the company doesn’t have, the filing said.

Speculation Mr Trump could lose control of some of his prized Manhattan assets, including Trump Tower and 40 Wall Street, swirled as the countdown began for the former president, 77, who has until Sunday to appeal against last month’s judgment that he and his company falsified valuations to gain favourable terms from lenders.

The former president, who is on track to clinch the Republican nomination, has asked a New York appellate court to waive the bond requirement while he appeals the judgment, arguing that paying now would cause him irreparable harm.

If the court turns down his request and he is unable to obtain a bond, New York Attorney General Letitia James, who sued Mr Trump in 2022, could begin enforcing the judgment at the beginning of next week.

Attorney-General Letitia James may seize Donald Trump’s assets. Picture: Getty Images via AFP.

In September last year Forbes magazine estimated Mr Trump’s net worth at US$2.6 billion, most of it tied up in illiquid real estate including golf courses in Scotland and his lavish private club Mar A Lago in Florida, including US$426 million in cash and liquid assets,

“We have, I believe, 400 plus and going up very substantially every month,” Mr Trump said in a deposition for New York’s attorney general at the time, who brought the fraud case against him, adding “my biggest expense is probably legal fees, unfortunately.”

The former president’s predicament stems from a ruling by judge Arthur Engoron last month that found Trump had falsely valued parts of his real-estate empire for financial gain. The judge imposed $US355m in penalties, plus interest, meaning Trump’s debt grows daily.

Trump earlier this month cleared another financial hurdle by securing a nearly $US92m bond from Chubb to guarantee a defamation judgment he owes to writer E. Jean Carroll.

In addition to the monetary penalties, Judge Engoron ordered that Trump be barred from running his business for three years, and his two sons, Eric and Donald Jr, for two. The judge also barred the company from applying for loans with financial institutions registered in New York for three years.

Ms James has opposed putting the judgment on hold and said there was no guarantee Trump could pay later if his appeal fails. “Defendants have never demonstrated that Mr Trump’s liquid assets—which may fluctuate over time—will be enough to satisfy the full amount of this judgment following appeal,” he office wrote.

Even if Ms James were to begin the seizure process, Mr Trump wouldn’t immediately lose his assets, lawyers said. To seize real estate, for example, she would need to bring a foreclosure action against Trump to obtain whatever equity he has in a property, said Mark Zauderer, a partner at Dorf Nelson & Zauderer. “The collection process can be painfully slow,” Zauderer said.

Mr Trump issued a cash appeal to supporters in an email on Monday from his Trump Save America Joint Fundraising Committee entitled “Bloodbath!”. That followed an outcry over his warning in Ohio on Saturday at a rally that there would be “a bloodbath for the country” if he were not re-elected, while talking about his plan to impose a tariff on imported cars.

The Biden campaign and media critics said the statement showed Trump wanted “another January 6” and had “an affection for violence”.

Additional reporting The Times, The Wall Street Journal