Former President Donald Trump’s attorneys said Monday in a new appellate court filing that he is facing “insurmountable difficulties” in obtaining a bond to satisfy the $464 million civil fraud judgment, which would require him to use real estate as collateral.
In February, Judge Arthur Engoron sentenced Trump to pay $464 million in disgorgement and interest after finding him guilty of a decade of business using misleading financial statements that overpriced his real estate holdings and inflated his fortune. Judge Arthur Engoron also prohibited Trump from running any New York businesses for three years. Donald Trump Jr. and Eric Trump, his sons, also faced a $4 million fine and a two-year prohibition.
“Defendants have faced what have proven to be insurmountable difficulties in obtaining an appeal bond for the full $464 million,” according to a confirmation by Trump Organization general counsel Alan Garten.
While Garten stated that Trump is “financially stable” and has “substantial assets,” the size of the judgment would force him to use his real estate as collateral for the bond. Garten’s assurance states that no surety bond provider, including Chubb, which is underwriting Trump’s $91.6 million bond to cover the $83 million verdict in the E. Jean Carroll defamation lawsuit, has agreed to accept real estate as collateral.
“For defendants, this presents a major obstacle,” Garten wrote.
Trump’s attorneys, who have termed the judgment “unconstitutionally excessive,” petitioned an appellate court again on Monday to allow Trump to obtain a lower bond amount.
“Obtaining such cash through a ‘fire sale’ of real estate holdings would inevitably result in massive, irrecoverable losses—a textbook irreparable injury,” defense counsels Alina Habba and Clifford Robert argued.
According to the document, Gary Guilietti, president of insurance surety Lockton businesses, who testified in Trump’s defense at trial, has assisted in the Trump Organization’s outreach to bond businesses. Guilietti stated in an affidavit that surety companies have refused to allow the Trump Organization to use its properties as collateral, leaving the company with only one option: post 120% of the bond in cash and cash equivalents totaling $557,491,716.
“While it is my understanding that the Trump Organization is in a strong liquidity position, it does not have $1 billion in cash or cash equivalents,” he wrote.
The New York Attorney General’s Office has objected to a lower bond, claiming Trump and his co-defendants “will attempt to evade enforcement of the judgment or make enforcement more difficult.”
The former president has denied any misconduct and stated that he will appeal.
Engoron ordered Trump to pay pre-judgment interest on each ill-gotten income (interest accruing based on the date of each transaction), as well as a 9% post-judgment interest rate once the case is resolved.
Will Thomas, a University of Michigan corporate law expert, previously told ABC News that the interest not only adds to Trump’s increasing legal fees, but it will also likely shape the former president’s strategy for his appeal.
According to Thomas, Trump would continue to accrue interest on the fine during his lengthy appeal of Engoron’s verdict unless he deposits the entire fine sum in an escrow account.
While Trump’s appeal will result in an automatic suspension of the enforcement of Engoron’s verdict, he must first deposit funds into an escrow account or post bail in order to appeal.
If Trump decides to post a bond to satisfy the fine during his appeal, the interest will continue to collect, potentially amounting to tens of millions of dollars.
