Court denies Trump's bid to freeze $464M judgment, after his lawyers say he'd have to sell properties to pay

The former president had sought to post a fraction of the bond amount.

February 28, 2024, 3:57 PM

A New York appellate court on Wednesday denied Donald Trump's attempt to freeze the judgment in his civil fraud case, a ruling that means, for now, that the former president is required to post a bond for hundreds of millions of dollars in the coming weeks.

Judge Anil Singh declined to address the amount of the bond, effectively requiring Trump by default to post a bond for the full judgment of $454 million.

Defense attorneys had said Trump was prepared to post a $100 million bond, arguing he had no way to secure a higher amount without selling off some of his real estate. A bond to cover the judgment in the case would have to be at least 120% of the total judgment -- more than $550 million, attorneys said.

"In the absence of a stay on the terms herein outlined, properties would likely need to be sold to raise capital under exigent circumstances, and there would be no way to recover any property sold following a successful appeal and no means to recover the resulting financial losses from the Attorney General," defense attorneys argued.

Judge Singh did agree to pause the enforcement of the part of the judgment that prohibited Trump and his sons from running their family business for the next several years. The ruling means the former president, Donald Trump Jr., and Eric Trump can remain in charge of the Trump Organization for the time being.

Trump still has at least two opportunities to appeal the ruling -- first with a panel of judges at New York's Appellate Division, First Department next month, then with New York's Court of Appeals if the first attempt is unsuccessful.

Manhattan Supreme Court Judge Arthur Engoron, in a judgment issued earlier this month, found Trump, his adult sons, and two former Trump Organization executives liable for a decade of fraudulent business activity in which they used "numerous acts of fraud and misrepresentation" to inflate Trump's net worth in order to get more favorable loan terms. He ordered the defendants to pay a total of $464 million in disgorgement and pre-judgment interest.

Republican presidential candidate and former President Donald Trump speaks during a campaign event at the Winthrop Coliseum on Feb. 23, 2024 in Rock Hill, S.C.
Alex Wong/Getty Images, FILE

In their court filing early Wednesday, Trump's lawyers argued that the penalties are "unprecedented and punitive."

"The exorbitant and punitive amount of the Judgment coupled with an unlawful and unconstitutional blanket prohibition on lending transactions would make it impossible to secure and post a complete bond," defense lawyers wrote in the filing. "Appellants nonetheless plan to secure and post a bond in the amount of $100 million."

In the filing, Trump's lawyers said that posting a bond to cover the entire judgment would not only be impossible but also unnecessary given the preexisting oversight provided by the Trump Organization's independent monitor. According to the filing, the current oversight coupled with the $100 million bond ensures that New York Attorney General Letitia James could collect the judgment if needed.

"Those assets are not going anywhere, nor could they given the oversight of the Monitor and the practical realities of the existence of the very public Judgment," the filing said.

In their motion for a stay, defense attorneys Clifford Robert and Alina Habba called Engoron's order "draconian" and said the punishments would unfairly impede Trump's family real estate business.

"The extraordinary relief Supreme Court has granted is punitive, patently improper, unsupported by the evidence, and/or unavailable under the Executive Law, and is premised upon claims this Court ruled are time-barred," the motion said.

The filing cited "the Attorney General's public threats that she will seize Appellants' real property forthwith to satisfy the Judgment," a reference to remarks New York Attorney General Letitia James made during an interview with ABC News.

"If he does not have funds to pay off the judgment, then we will seek judgment enforcement mechanisms in court, and we will ask the judge to seize his assets," James told ABC News last week.

In response to defense's filing, an attorney for the New York attorney general pushed back against Trump's plan to post a $100 million bond, arguing in their own filing that Trump and his co-defendants might attempt to evade enforcement of the $464 million judgment.

"Contrary to defendants' argument, there is substantial risk that defendants will attempt to evade enforcement of the judgment (or make enforcement more difficult) following appeal," the attorney general's filing said.

Dennis Fan of the AG's office suggested in the filing that Trump's lawyers admitted the former president lacks the money to cover the judgment.

"There is no merit to defendants' contention that a full bond or deposit is unnecessary because they are willing to post a partial undertaking of less than a quarter of the judgment amount," Fan wrote. "Defendants all but concede that Mr. Trump has insufficient liquid assets to satisfy the judgment; defendants would need 'to raise capital' to do so."

Fan argued that a full bond would be necessary in order to ensure the judgment could ultimately be collected, highlighting past behavior by the Trump Organization that he argued demonstrates the possibility they might evade the fine. He cited a $40 million transfer previously flagged by the company's independent monitor and a recent effort to list Trump's companies with Florida addresses.

"And even now, in claiming urgency, defendants have made no efforts to be forthcoming with this Court about their specific efforts to obtain a bond," the filing said.

The attorney general asked the court to deny Trump's request for an interim stay, expedite its review of the request, continue the oversight of the Trump Organization through its monitor, and ensure that the defendants can fully satisfy the entire judgment.

Trump's attorneys requested the stay pending their appeal of Engoron's ruling, which they filed Monday.

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