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Trump Spurned by 30 Companies as He Tries to Raise $454 Million Bond in Fraud Case

by 9999biz.com
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Donald J. Trump’s lawyers disclosed on Monday that he had failed to secure a roughly half-billion dollar bond in his civil fraud case in New York, arguing that doing so was “a practical impossibility.”

The filing, coming one week before the bond is due, raised the prospect that the former president might face a financial crisis unless an appeals court comes to his rescue. If the court declines, the result could be dire: The New York attorney general’s office, which brought the civil fraud case, might move to seize some of Mr. Trump’s assets.

Faced with that threat, Mr. Trump has asked the appeals court to pause the $454 million judgment that a New York judge imposed on Mr. Trump in that case last month, or accept a bond of only $100 million.

The former president has been unable to secure the full bond, his lawyers said in the court filing on Monday, despite “diligent efforts.” Those efforts included approaching about 30 companies that provide appeal bonds, and yet, the lawyers said, he has encountered “insurmountable difficulties.”

The companies would essentially promise to cover Mr. Trump’s judgment if he lost an appeal and failed to pay. In exchange, he would pledge collateral and pay the company a fee as high as 3 percent of the bond.

They appear to be balking over a significant problem: Mr. Trump does not have enough liquidity to obtain the bond. To offer a bond of this size, the companies would require Mr. Trump to pledge more than $550 million in cash, stocks and bonds as collateral — a sum he simply does not have.

Although the former president boasts of his billions, his net worth is derived largely from the value of his real estate, which bond companies rarely accept as collateral. Mr. Trump has more than $350 million in cash, a recent New York Times analysis found, far short of what he needs.

The judge in the civil fraud case, Arthur F. Engoron, levied the $454 million penalty and other punishments after concluding that Mr. Trump had fraudulently inflated his net worth to obtain favorable loans and other benefits. The case, brought by the New York attorney general, Letitia James, has posed a grave financial threat to Mr. Trump.

He might have to post an appeal bond worth more — possibly above $500 million, to reflect the interest he will owe — in order to prevent Ms. James from seizing his assets on March 25.

Under the law, Ms. James could have moved to collect from Mr. Trump as soon as Justice Engoron ruled, but she offered a 30-day grace period, until March 25. It is unclear whether she will provide Mr. Trump extra time or if she will move swiftly to collect. Nor is it clear whether the appellate court will rule on his plea for help before the deadline.

Mr. Trump could also seek to appeal to New York’s highest court, and it is unclear whether Ms. James will hold off on the seizure while he pursues that route.

A spokeswoman for Ms. James did not immediately respond to a request for comment.

Mr. Trump has denied all wrongdoing and claimed that Ms. James and Justice Engoron, both Democrats, are out to get him.

“This is a motion to stay the unjust, unconstitutional, un-American judgment from New York Judge Arthur Engoron in a political witch hunt brought by a corrupt attorney general,” Steven Cheung, a spokesman for Mr. Trump’s campaign, said in a statement. “A bond of this size would be an abuse of the law, contradict bedrock principals of our republic, and fundamentally undermine the rule of law in New York.”

The looming deadline could not come at a worse time for Mr. Trump. Just last week he finalized a $91.6 million bond in a defamation case he recently lost to the writer E. Jean Carroll, a costly deal that drained him of precious cash.

Mr. Trump, who obtained that bond from the insurance giant Chubb, pledged an investment account at Charles Schwab as collateral, records show. He most likely pledged more than $100 million in cash and stocks and bonds that he could sell in a hurry — investments that are now no longer available for him to use as collateral in the civil fraud case.

A nearly $500 million bond, Mr. Trump’s lawyers wrote on Monday, “is unprecedented for a private company.”

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