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If the former president fails to meet the deadline to post the $454 million bond in his civil fraud case, New York Attorney General Letitia James will have the opportunity to pursue Donald Trump’s valuable properties.
Trump, 77, recently submitted documents to an appeal court in an effort to avoid the requirement of posting a bond while he contests the substantial judgment from February. This judgment continues to accumulate a staggering amount of interest on a daily basis.
The potential Republican candidate for the 2024 presidential election has encountered significant challenges in securing the bond, despite reaching out to more than 30 firms. According to his attorneys, he is currently facing insurmountable difficulties in obtaining the necessary financial backing.
In February, Manhattan Supreme Court Justice Arthur Engoron issued a substantial judgment against the real estate mogul. This decision came after a three-month trial, during which the Attorney General’s office presented evidence that Trump had inflated his net worth by billions of dollars each year on financial statements. The purpose of this exaggeration was to secure more favorable loan and insurance terms.
Why does Trump have to post a $454 million bond ?
Trump has expressed his intention to challenge Engoron’s ruling, but he is required to either place the complete judgment amount in escrow or obtain a bond to demonstrate his financial responsibility in the event that he does not succeed in his appeal.
According to Kevin J. O’Brien, a former prosecutor turned defense attorney in New York, it is a standard procedure for the courts to ensure that individuals appealing a financial penalty have the means to pay it if they end up losing the case.
“This is an effort to ensure the appellants remain truthful,” O’Brien explained.
“The challenge lies in the enormity of the judgment.”
According to his lawyers, Trump would need to provide collateral amounting to $557.5 million, which is 120% of what he owes, in order to secure the bond.
Trump had initially attempted to reduce the bond amount to $100 million, but now he is trying to avoid paying the bond entirely.
O’Brien suggested that if Trump can demonstrate to the court his potential for success in his appeal, he may have a valid case for reducing the bond amount.
Could Trump sell off or mortgage his properties?
Trump’s legal team contended that selling his properties at a discounted price would result in significant financial losses and make it difficult for him to repurchase them at a later date, should he win the final appeal.
Legal experts have pointed out that if Trump were to consider taking out a mortgage on one of his properties to secure the massive bond, there could be potential complications.
He may already have significant financial obligations and lenders might be hesitant to engage with him due to his legal and financial troubles, as well as the increased scrutiny he is facing, according to O’Brien.
According to Trump’s lawyers, he had engaged in discussions with 30 firms in an effort to secure a significant bond. However, all of the negotiations fell apart because the companies were unwilling to accept his properties as collateral.
O’Brien remarked, “that is just how things happen” and it is “unlikely that the appellate division will be relocated solely due to his need to sell assets.”
“I doubt he will achieve much success,” O’Brien commented on the appeal. “The appellate division will carefully consider Judge Engoron’s decision before making any changes.”
What happens if Trump doesn’t make the deadline?
If the Appellate Division, First Department does not grant Trump’s request to extend the deadline for his bond and if he is unable to secure the funds by then, AG James can begin pursuing his assets — a course of action she has expressed her willingness to take.
New York real estate lawyer Melissa Levin suggests that if Trump is compelled to pay the entire amount by Monday, he will need to personally sell off his properties in order to obtain the remaining funds to cover the bond.
“If he fails to take action, Letitia James and New York State could potentially request the court to seize specific assets as a means of satisfying the judgment,” she explained.
According to both Levin and another New York civil lawyer Imran Ansari, the Attorney General has the ability to pursue Trump’s properties in the Empire State and other locations as well.
According to Levin, she has the potential to pursue various assets such as bank accounts, wages, art, accounts receivable, rent on buildings, and money market accounts.
“The AG has the authority to seize assets belonging to Trump and the Trump Organization, including their extensive real estate holdings, both in and outside of the state. This includes properties like Mar-a-Lago,” Ansari stated confidently.
What Trump properties could James seize?
Trump has a significant presence in the real estate market, with ownership or stakes in several prominent buildings in New York City. These include 40 Wall St., the Trump International Hotel and Tower, Trump Park Avenue, and 1290 Avenue of the Americas, where he holds a 30% profit share.
The Trump Organization has held the ground lease to the Trump Building at 40 Wall St. since 1995 and leases out space there, positioning him more as a landlord rather than a direct owner.
He holds ownership stakes in various areas of the Trump International Hotel and Tower at One Central Park West, such as the parking garage, room-service kitchens, valet booth, lobby bathrooms, a restaurant space, and a single unit.
The profit share that Trump holds in the 1290 Avenue of the Americas building will continue until 2044.
Trump acquired the 120-unit 502 Park Ave. building in 2001 for $115 million, transforming it from a hotel into his own property.
According to Curbed, the real estate holding company that shares the same name as him also possesses the retail and commercial sections of Trump Tower at 724 Fifth Ave. Meanwhile, the penthouse triplex is owned by the former president himself.
O’Brien mentioned that in the event the AG decides to seize assets in different states, such as Mar-a-Lago in Florida, an application would need to be made with the court in that specific location.
According to O’Brien, pursuing Trump’s valuable assets could initiate a lengthy and complex legal procedure.
“It will be a considerable amount of time before Trump relinquishes any of these properties,” the former prosecutor remarked.
