Key Questions As Trump Approaches Monday’s Deadline To Pay $454 Million Fraud Penalty

NEW YORK — Donald Trump is approaching a significant deadline in his most expensive court battle. Suppose the former president does not provide a financial guarantee by Monday. In that case, New York’s attorney general can begin collecting on the more than $454 million Trump owes the state in a civil fraud action.

Trump’s lawyers are attempting to prevent that from happening. They have urged a judge to halt collection attempts while he appeals the verdict.

The likely Republican presidential nominee attempted to obtain a bond for the full amount, which would have halted the clock on collection during his appeal and ensured the state received its money if he lost.

However, Trump’s lawyers told the court that more than 30 underwriters declined. They stated that getting a bond for such a vast sum is “a practical impossibility.”

This raises the potential that New York Attorney General Letitia James will try to implement the ruling as soon as Monday.

Here’s a look at what that could look like and what it means for Trump’s corporate empire.

Could New York seize Trump’s assets?

Yes. If Trump cannot pay, the state “could levy and sell his assets, lien his real property, and garnish anyone who owes him money,” Syracuse University Law Professor Gregory Germain stated.

Potential targets include his Trump Tower penthouse, the Wall Street office building, and golf clubs. James’ agency could potentially seek court authorization to drain Trump’s bank accounts and investment portfolios and sell off other assets such as his planes, helicopters, and golf carts.

When someone cannot pay a civil penalty, a typical legal technique is to seize assets.

In a well-known case, O.J. Simpson’s Heisman Trophy was seized and auctioned to cover a portion of a $33.5 million wrongful death verdict. More recently, a Miami, Florida, municipal commissioner fought to save his home after a federal judge ordered it seized and auctioned off to help pay a $63.5 million verdict in a political retribution lawsuit.

In 1999, New York state seized three moving trucks to help pay off a $250,000 judgment against a corporation that defrauded its clients. In 2006, the authorities seized a $342,000 investment account to pay a portion of a $2 million judgment against illegal tire dump operators.

Could it happen soon?

It’s not likely. State officials can’t simply padlock Trump Tower. Any attempt to collect would be made through legal means, such as liens and foreclosures. However, the state might establish the stage by subpoenaing Trump to provide details on his assets.

James, a Democrat, recently told ABC that if Trump cannot pay, her agency “will ask the judge to seize his assets.”

WHY DOES TRUMP OWE THIS MONEY?

In 2022, the state sued Trump through James’ office, alleging that he had been defrauding banks and insurance companies for years by exaggerating his wealth on financial statements concerning different business transactions.

In February, following a 2½-month trial, Judge Arthur Engoron ordered Trump to pay $355 million plus interest, saying, “The frauds found here leap off the page and shock the conscience.”.

Trump rejects any attempt to deceive banks or others about his wealth. He has claimed that the judge’s judgment and the lawsuit were politically motivated attempts to prevent him from retaking the White House in 2024.

He has also argued that it is unreasonable to force him to sell assets or spend large sums of money on a bond while the case is still being reviewed, even though courts in New York and other jurisdictions frequently require an appeal bond.

When asked Tuesday if he is certain he can pay, Trump slammed what he called “a rigged trial by a crooked judge and a crooked attorney general.”

“We have a lot of cash and a terrific company, but they want to take it all away, or at least the cash. Billions of dollars in value and billions of dollars in property. But they want to take the money away so I can’t use it for the campaign,” Trump remarked after voting in Florida’s Republican primary.

“We’ll see how the courts rule on it,” he told reporters.

COULD TRUMP PAY IF HE WANTED?
Although much comes from his real estate assets, Trump claims to be worth several billion dollars.

On his most recent publicly available financial statement, he reported possessing approximately $294 million in cash or cash equivalents such as stocks. However, the document is out of date, covering the fiscal year ending June 30, 2021. It’s also one of the documents Engoron judged fake because it exaggerated Trump’s wealth.

Since then, Trump has made roughly $187 million by selling the lease to his Washington, D.C. hotel and the rights to manage a New York City golf club. His current cash situation needs to be clarified. He claimed over $400 million in cash during his civil fraud trial. However, this is unsubstantiated.

Trump has additional legal obligations. In January, a jury ordered him to pay $83.3 million for defaming writer E. Jean Carroll, who accused him of sexual assault. This month, Trump obtained a $91.6 million bond to guarantee the decision while he appealed.

Trump’s lawyers said freeing up cash by selling some of his properties in a “fire sale” would result in large, irrecoverable losses.

ARE THERE OTHER WAYS TRUMP CAN RAISE MONEY?

Trump might benefit financially from a planned deal to list his social media company, Trump Media & Technology Group, on the stock exchange under the symbol DJT.

If the purchase is approved at a shareholder meeting on Friday, Trump would own at least 58% of the shares in the firm that runs his Truth Social platform. Depending on the share price, that could be worth several billion dollars, but he may need more time to convert the stock into cash.

Meanwhile, the amount Trump owes grows by approximately $112,000 daily due to interest. As of Tuesday, he owes the state around $457 million.

To secure a bond, Trump’s lawyers stated they would have to deposit collateral equaling 120% of the verdict.

Last month, Trump’s lawyers proposed posting a $100 million bond, but a judge in the state’s mid-level appeals court ruled that he must pay the entire sum. Trump has appealed the judgment.

COULD TRUMP DECLARATE BANKRUPTCY?

If he entered bankruptcy, the judgment would be stayed under federal bankruptcy law. However, he would still be personally accountable if only his company, the Trump Organization, or other organizations went bankrupt.

Trump has consistently claimed that he has never personally declared bankruptcy, even though several of his past firms have.

“If he can’t post a bond or meet the appellate division’s bonding requirements, then I would expect him to file bankruptcy to take advantage of the automatic stay on collection,” the law professor said.

SOURCE – (AP)