Former President Donald J. Trump avoided a financial disaster by reaching a deal to postpone payment of a $454 million judgment in his civil fraud case while he pursues an appeal. The deal involves a bond that will prevent the New York attorney general, Letitia James, from collecting the money until the appeal is resolved. James had accused Trump of inflating his net worth by up to $2 billion, leading to the judgment against him. The former president secured a $175 million bond from Knight Specialty Insurance Company, preventing his bank accounts from being frozen.
The bond required Trump to pay a fee to the insurance company and pledge cash and other liquid investments as collateral. Despite his substantial net worth, which includes mostly real estate assets, Trump had difficulties securing the full $454 million bond as bond companies don’t typically accept real estate as collateral. His lawyers faced challenges in finding a suitable bond provider, with over 30 companies turning them away. Ultimately, Trump managed to secure the $175 million bond, likely digging into his reserves to meet the terms of the deal.
The terms of the bond may be costly for Trump, but failing to secure it would have left him vulnerable to immediate collection actions by James. She could have frozen his bank accounts and potentially moved to seize his valuable New York properties, such as his office tower at 40 Wall Street. Trump’s lawyers expressed readiness to appeal the judgment and overturn what they called an unjust verdict. The former president had previously posted a separate $91.6 million bond in a defamation case brought by writer E. Jean Carroll, with the collateral for that bond being unavailable for the civil fraud bond.
While the bond deal resolves a significant liability for Trump, he still faces other legal challenges, including four criminal indictments in different cities. The first trial is scheduled to begin in two weeks in Manhattan, where Trump is accused of covering up a sex scandal during the 2016 presidential campaign. With his status as the presumptive Republican nominee for president, Trump’s legal battles continue to pose potential risks to his financial and political future. The successful negotiation of the bond buys him time to pursue his legal appeals and protect his assets from immediate collection efforts.
