Former President Donald Trump is on the brink of discovering how the state of New York plans to reclaim more than $457 million from him in a civil business fraud case. This comes even as he challenges the verdict that resulted in this massive financial obligation.
The victory in court by State Attorney General Letitia James didn’t immediately lead to efforts to enforce the judgment, as she allowed a pause for Trump to seek an appeals court’s intervention to delay payment. This grace period concludes on Monday, and it remains to be seen whether James will extend it further. Trump, the leading candidate for the Republican presidential nomination, has been attempting to avoid posting a full bond to delay the collection process as he appeals, but so far, courts have denied this request.
James, a Democrat, has expressed readiness to seize Trump’s assets if he fails to pay up, emphasizing her commitment to ensuring the judgment is enforced. Although specifics on the process or the assets targeted have not been disclosed, and her office has recently avoided discussing its strategy, the filing of a notice of judgment is a step towards potentially initiating collection efforts.
Common legal practice allows for the seizure of assets when an individual cannot settle a civil court penalty in cash. For Trump, this could mean his Trump Tower penthouse, aircraft, Wall Street office building, or golf courses might be at risk. Additionally, his bank and investment accounts could be targeted. Trump has claimed to possess nearly $500 million in cash, much of which he plans to allocate to his presidential campaign, accusing James and New York state Judge Arthur Engoron of attempting to undermine his campaign by targeting his funds.
The complexity of selling off such significant assets is highlighted by Stewart Sterk, a real estate law professor, who notes that finding buyers for such high-value properties is not a straightforward task, and achieving true value at auction is unlikely.
Trump’s financial woes stem from a lengthy civil trial over allegations of inflating his wealth in financial statements, misleading bankers and insurers. Despite Trump and his co-defendants denying any wrongdoing and asserting that the financial statements undervalued his wealth, Judge Engoron ruled in favor of the attorney general, ordering Trump to pay $355 million plus accruing interest. Smaller amounts were ordered for co-defendants, including his sons and company executives, Donald Trump Jr. and Eric Trump.
Under New York law, filing an appeal does not automatically halt the enforcement of a judgment unless a bond covering the owed amount is posted. Trump’s legal team has argued that posting such a bond is unfeasible, as underwriters demanded 120% of the judgment amount and refused real estate as collateral. This would necessitate locking up over $557 million in liquid assets, which they argue is impractical for the continued operation of Trump’s business. Trump’s attorneys have sought an appeals court intervention to freeze collection efforts without requiring a bond, a move opposed by the attorney general’s office.