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Trump Says Posting $454 Million Bond in NY Fraud Case ‘A Practical Impossibility’

Trump Says Posting $454 Million Bond in NY Fraud Case ‘A Practical Impossibility’
Former president Donald Trump on the campaign trail. (Photo: Win McNamee / Getty Images)

Donald Trump said it’s a “practical impossibility” to post a full bond while he appeals a $454 million penalty against him in New York state’s civil fraud case because doing so may require cash reserves nearing $1 billion.

Trump, who is seeking to post a smaller bond or no bond at all while he challenges the verdict, would need to hold a “fire sale” of his properties to come up with sufficient cash to use as collateral, he said Monday in a state appeals court filing.

New York Attorney General Letitia James, who won a lawsuit accusing Trump of inflating the value of his assets for more than a decade, has said his request should be denied because he cannot be trusted.

The filing is the latest sign that the real estate mogul is facing a cash crunch after losing two civil trials this year, complicating his crowded legal calendar as he campaigns to return to the White House amid a torrent of courtroom troubles, including four criminal prosecutions. He denies wrongdoing in all the cases, and argues the New York fraud verdict is far too high and seeks “to destroy a successful business.”

Approached 30 Companies

In Monday’s filing, Trump said he has approached about 30 surety companies through four separate brokers to reach his estimate that “a bond requirement of this enormous magnitude” could require “cash reserves approaching $1 billion.” He didn’t explain where he got the figure, but surety companies can require collateral far exceeding a verdict to ensure they don’t face any risk.

“Diligent efforts since that time, including countless hours negotiating with one of the largest insurance companies in the world, have proven that obtaining an appeal bond in the full amount of the judgment is not possible under the circumstances presented,” Trump said.

While his filing didn’t name any surety companies, the former president worked with Chubb Ltd.’s Federal Insurance Co. to post a $91.6 million bond earlier this month to appeal a verdict against him in E. Jean Carroll’s defamation suit.

Trump said that surety companies typically require collateral of approximately 120% of the amount of the judgment. He also said that surety companies charge bond premiums of approximately 2% per year with two years in advance, which would cost an extra $18 million.

Cash Crunch

Surety companies generally prefer to hold cash as collateral — a problem for Trump because he testified last year to having about $400 million in cash. The companies can hold real estate as collateral, but that could result in higher fees or require the use of properties far exceeding the value of the judgment.

James has argued that without a full bond, Trump could attempt to avoid paying the fine if his appeal fails. In a court filing last week, she rejected his suggestion that a bond isn’t necessary because his ownership interest in his 40 Wall St. tower alone was sufficient to pay the fine if he lost.

The attorney general said she wants to see proof that surety companies refused to accept the skyscraper as collateral and that sureties “have refused to accept this property, his other real estate interests, or his private jets or helicopters as collateral for an appeal bond.”

Justice Arthur Engoron, who oversaw the trial without a jury, found that Trump inflated the value of his assets by billions of dollars a year for more than a decade to get better terms on loans, reaping hundreds of millions of dollars in “illegal profit.” He ordered Trump to pay a $355 million fine plus $99 million in pre-trial interest and banned him from running any New York-based company for three years.

Trump’s sons Eric Trump and Donald Trump Jr. were also found liable and ordered to pay a total of nearly $10 million. They are also appealing.

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