Trump unable to finance an appeal bond for at least $450 million, lawyers say
NEW YORK – Donald Trump has been unable to finance an appeal bond for at least $450 million to cover a judgment in the New York attorney general’s business fraud case against him and is seeking a reprieve from an appellate court to keep the state from seizing assets, according to a court filing Monday.
The former president’s lawyers said in the filing that Trump and the Trump Organization , the real estate hospitality and golf resort company he solely owns, have been unable to get a surety company, an insurer that issues court bonds, to accept property as collateral – stalling any efforts to obtain a bond that is due to be posted in a week.
“Critical among these challenges is not just the inability and reluctance of the vast majority of sureties to underwrite a bond for this unprecedented sum, but, even more significantly, the unwillingness of every surety bond provider approached by Defendants to accept real estate as collateral,” Alan Garten, the Trump company’s general counsel, wrote in a sworn submission.
Garten said Trump and the company approached 30 surety companies through four brokers, proposing combinations of liquid and real estate assets, without success. None of them were willing to accept real estate collateral for appeal bonds, he said.
The legal team behind Trump, the likely Republican nominee against President Biden in the 2024 election, recently failed to get an emergency appeals judge to put off the 30-day deadline that the attorney general has imposed to give the company time to fulfill its appeal bond obligation. That judge also rejected an offer of a $100 million bond in lieu of the full amount. A full panel will soon examine the same issues.
Trump, his company and several current and former executives were found civilly liable in Manhattan state court this year for engaging in illegal acts to defraud banks and insurance companies by lying about the true value of his assets to falsely obtain profits and savings in business over a decade.
New York Attorney General Letitia James, who brought the case, said Trump misstated the value of his properties and other assets by up to $2.2 billion a year from 2011 to 2021.
Surety companies are requiring Trump to put up the entire amount needed for the bond, around $464 million, in collateral, according to the defense filing. Legal experts said that a likelihood of the appeal failing is the main reason companies would mandate such terms.
“Insurance companies in appeals cases tend to want the full amount of the judgment as collateral,” said Adam Pollock, an attorney who formerly served as assistant attorney general in New York.
Surety companies generally accept only cash or an irrevocable letter of credit as collateral, according to JD Weisbrot, who has worked in the business for more than 20 years and is a managing director at the underwriting firm Risk Strategies.
Someone with assets like Trump, who has the majority of his fortune tied up in real estate, would ideally go through a bank to get that letter of credit, Weisbrot said. A bank would also likely want the full amount of the bond in collateral but might accept many more types of collateral, including deeds to real estate, fine art or other assets, he said. That could free up funds for someone who owns lots of property.
“My feeling is a bank would likely take a similar position as a surety and likely also require a dollar-for-dollar amount in collateral,” he said. “But a bank is more flexible as a financial situation than a surety would be in terms of the type of collateral.”
Trump has few existing relationships with big banks on Wall Street, according to a financial disclosure he filed with the government in August as part of his candidacy. Deutsche Bank, which provided him with a number of loans that fueled the expansion of his business before he entered politics, does not appear to be a current lender.