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The $175 million bond former President Donald Trump posted in his civil fraud case is now under scrutiny as the New York attorney general’s office has requested the insurance company that helped secure the bond to prove their financial soundness. If proof is not provided within 10 days, the bond could be invalidated. Trump and his business associates posted the bond earlier this week after an appeals court lowered the amount he had to pay immediately while appealing the case. The bond was underwritten by Knight Specialty Insurance Company, chaired by billionaire Don Hankey, who said it was collateralized through a combination of cash and investment-grade bonds.

The attorney general’s office has filed a motion asking for more information about Knight’s financials and how the bond was collateralized, as the company is not admitted in New York. Companies providing bonds that are not admitted in New York must demonstrate their financial soundness and show that enough collateral has been put up to cover the full bond amount. Trump and his co-defendants filed an updated bond with the court on Thursday, including more information about Knight’s financials, but it does not fully address the requirements set by the attorney general’s office. They now have 10 days to provide additional information, or the bond may be invalidated.

The ex-president is appealing his loss in the civil fraud case, although it is uncertain how long the process will take. While the appeals court allowed him to post the $175 million bond while appealing the ruling, Trump and his co-defendants will still be liable for the full amount they owe if they lose the appeal. Interest on the amount is accruing at a nine percent rate each year, adding more than $111,000 per day for Trump alone. Knight reported a surplus to policyholders of $138 million in its updated bond, which is less than the $175 million that Trump owes. This means that if the bond is not fully secured or Trump cannot pay the amount when due, it could significantly impact the company’s cash.

In February, Trump and his co-defendants were found liable for fraudulently misstating the value of their assets on financial statements. New York Attorney General Letitia James argued that this was done to obtain more favorable business deals and reflect a higher net worth for Trump. The judgment against them amounts to more than $464 million, with Trump ordered to pay over $454.2 million. The appeals court partially granted Trump’s request to delay the payment on March 25, the same day that James could have started seizing Trump’s assets if he did not pay. The judgment also included other punishments, such as Trump and his sons being prohibited from running New York companies for a designated period.

The situation surrounding Trump’s bond in the civil fraud case remains uncertain, with the attorney general’s office seeking more information from Knight. If the bond is invalidated, Knight would still be responsible for paying the $175 million until Trump secures a new bond. Trump and his co-defendants have 10 days to provide the court with additional information, or the bond may be declared “without effect.” The repercussions of this case could have far-reaching implications for Trump and his associates, as they continue to navigate the legal challenges they face.

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