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Trump pays $175m bond to avert asset seizure

Trump pays $175m bond to avert asset seizure
Donald Trump during NATO Summit in London, Britain, 4 December 2019. The former US president has paid a $175-million bond to put a massive civil fraud verdict on hold while he appeals it. (Photo: EPA-EFE/WILL OLIVER)

Donald Trump has stumped up the cash for a $175-million bond to put a massive civil fraud verdict on hold while he appeals it, assuring New York state won’t start seizing the former president’s assets, at least for now.

The bond, posted on Monday with a Manhattan appeals court, prevents enforcement of a $454-million penalty levied by a judge against the property mogul in February for lying about his assets for years to get better loan terms. Trump, who is campaigning to return to the White House in the November election, is still on the hook for the full amount — plus millions in interest — if his appeal fails. 

Trump initially had struggled to get a bond because he was required to put up 120% of the full penalty, or more than half a billion dollars, in cash. But the appeals court on 25 March granted his request for a smaller bond, which Trump claimed was a sign the appeals court would eventually overturn the verdict.

“As promised, President Trump has posted bond,” his lawyer Alina Habba said in a statement. “He looks forward to vindicating his rights on appeal and overturning this unjust verdict.”

The bond was arranged and signed by Los Angeles-based Knight Specialty Insurance Co., a relatively small player in the industry whose chairman Don Hankey built a fortune by expanding his car dealership company into financial services. Trump previously turned to Chubb’s Federal Insurance Co. for an appeal bond to cover an $83.3-million verdict against him in writer E. Jean Carroll’s defamation lawsuit, which he lost in January. 

The former president had said a full bond was “unattainable” because 30 insurance companies that arrange such bonds wouldn’t take his property as collateral and would only take cash. Trump recently said he had nearly $500-million in cash and vowed to cover the reduced bond with it.

New York Attorney General Letitia James, who sued Trump and won at a non-jury trial, had argued a full bond was necessary because Trump can’t be trusted to pay the fine if he loses the appeal.

Getting the smaller bond helped Trump overcome one the biggest financial obstacles of his career. Without it, the former president claimed he’d be forced to hold a “fire sale” of assets to raise cash, hurting his ability to run his company and contribute to his campaign. His losses from such sales would be irreversible, he argued, even if he won the appeal. 

James, a Democrat, had said she would seize his assets to cover the judgment if he didn’t arrange the bond. Her office had already begun laying the groundwork to do so in nearby Westchester County, where Trump owns a golf course and an estate called Seven Springs.

Trump also faces four criminal prosecutions, including two cases alleging he conspired to overturn the result of the 2020 presidential election. His first criminal trial, over charges he falsified business records to conceal a hush money payment to a porn star before the 2016 election, is set to go to trial on 15 April in Manhattan.

Trump denies wrongdoing in all the cases and claims without evidence that they’re part of a Democratic-led “witch hunt” against him to undermine his campaign.

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