Former President Donald Trump doesn't have the cash he needs to stop the state of New York from potentially seizing his assets. He's asking the court — an institution he's shown little but contempt for — for a bit of mercy.
In a court filing Monday, Trump's lawyers laid out the stark economic reality facing the leading Republican candidate for president. His team spent "countless hours" negotiating with some 30 entities that could finance the roughly half-a-billion-dollar bond he's on the hook for.
But none would take the deal.
If Trump doesn't pony up the $500 million or so he needs to set aside, pending his appeal of last month's order against him for ill-gotten gains on his properties, New York Judge Arthur Engoron says Trump forfeits his right to appeal, and New York Attorney General Letitia James can start seizing Trump's properties and selling them to pay down what he owes.
Trump's lawyers, for their part, say the ruling is unprecedented and underwriters don't write checks that big — even to billionaires. But if we take Trump's lawyers at their word, that is a damning admission of a potentially serious financial dilemma for a leader who spent his career building the Trump brand as one of a savvy real estate mogul with extensive access to capital.
What could happen to Trump's properties?
James has made it clear she won't hesitate to go after Trump's properties if he doesn't come up with the cash.
"If he does not have funds to pay off the judgment, then we will seek judgment enforcement mechanisms in court, and we will ask the judge to seize his assets," she told ABC News last month.
Legal experts said Monday they didn't expect much leniency from the court.
"I think to treat Trump differently here undercuts the entire judgment, which is that no one is above the law, including a former president," said Temidayo Aganga-Williams, a partner at law firm Selendy Gay. "To allow him to not have to put up the entire bond would basically say that he's not on the hook the way anyone else would be."
It's not clear what properties James might seize, when she might take hold of them, and in what order she might come after them. But she told ABC News that, "I look at 40 Wall Street each and every day," referring to the Trump-owned building in the Financial District.
A decade ago, the Trump Organization received a bank-ordered appraisal of 40 Wall Street, valuing the building at $220 million, according to James.
Judge Engoron found that Trump inflated the value of the building. James said that Trump valued the building at $735.4 million in 2015.
It's unclear how much New York would get for that building if she sold it off after seizing it. If the state looks to make a quick turnaround, it could sell for bargain prices if buyers sense a fire sale.
Why Trump can't get a bond
Trump faces dozens of expensive criminal counts and an $83 million civil judgment against him in a defamation case brought by E. Jean Carroll. Banks, many of which have already said they won't do business with Trump, may have found his potential financial and criminal liabilities too risky to work with the former president.
"Financial institutions are willing to make money, if there's money to be made," Aganga-Williams said. "If people think you're a money-loser, they're not going to put that on the line."
And while there may be individual benefactors who'd want to pony up cash for Trump, such a transaction would potentially run afoul of the Federal Election Commission laws on donating to presidential candidates, said Mitchell Epner, a former federal prosecutor who works for the law firm Rottenberg Lipman Rich.
"Nobody has ever before had to answer the question of whether bailing a presidential candidate out from a $500 million verdict against them counts as a campaign contribution."
Trump's personal wealth is estimated at around $2.6 billion, according to Forbes, with much of that tied up in real estate holdings. The underwriters Trump has approached for his New York bond won't accept real estate as collateral — they need cash, according to his lawyers.
Trump is trying to convince the appellate court that securing a bond in the full amount is "a practical impossibility." His lawyers are asking the court to delay posting the bond while his appeal is underway — a process that could take years.
It's a bold request for leniency, given how Trump publicly disparaged the court during the civil fraud trial despite being fined and reprimanded by Judge Engoron.
Last month, Engoron found that Trump and his co-defendants, including his adult sons, fraudulently inflated the value of Trump's assets to obtain more favorable loan and insurance rates. Engoron wrote in his ruling that the Trumps' "complete lack of contrition and remorse borders on pathological," and ordered them to pay a penalty that exceeds $450 million with interest.
"He has no good options, and he doesn't even have any 'best bad options,'" Epner said. "His two choices are either: a) Get a court to agree that he doesn't have to put up a bond as security, or b) suffer the consequences that as of a week from now, New York Attorney General Tish James will be able to start execution process to grab his assets."
Comments
Post a Comment