According to a new report, Donald Trump’s $175 million bond arrangement in his civil fraud lawsuit may serve as a warning to New York Attorney General Letitia James.
Trump this week posted a bond in James’ business fraud case against him, barring her from seizing his assets while he appeals Judge Arthur Engoron’s decision. Engoron, siding with James in a civil suit accusing Trump and top executives at The Trump Organization of conspiring to inflate his net worth by billions of dollars on financial statements provided to banks and insurers to make deals and secure loans, ordered Trump to pay $355 million in February.
Following the verdict, his debt increased to $464 million due to interest. Engoron earlier ordered that Trump would have to pay the money to stop James from seizing his assets, but a court in March reduced the bail to $175 million.
The bond made by Knight Specialty Insurance Corporation, a California-based corporation controlled by the Hankey Group, has now come under examination, with James questioning its sufficiency.
A new story from The Daily Beast claims that a hidden paragraph in the agreement, which describes the contact as “bizarre” and “shadier than it looks,” may cause James anxiety.
The contract states that if the judgment is “affirmed” or the “appeal is dismissed,” the defendants in the case “shall pay to Plaintiff…the sum directed to be paid by the judgment plus interests and costs or any part of it as to which said judgment is affirmed,” but there is no guarantee the insurance company will pay.
According to the story, this essentially means that Trump will be compelled to pay the judgment if he loses the appeal, but it also raises issues about whether the insurance will pay if he is unable, therefore leaving James in the same position as before Trump secured the bond.
According to N. Alex Hanley, CEO of Jurisco Surety Bonds, the language is “not common” and may have been introduced “to limit the liability to the surety.”
Recent days have not only raised issues with the contract language, but also with the bond. James questioned Knight’s ability to pay the $175 million bond.
In a legal statement this month, James’ office stated that she “takes exception to the sufficiency of the surety to the undertaking given by defendants” and that Knight Specialty Insurance Company granted the bond “without a certificate of qualification pursuant to Insurance Law.”
Meanwhile, a court rejected the bond agreement paperwork and returned it for revision due to the lack of a current financial statement.
