Topline
The New York attorney general’s office argued Friday that the $175 million bond former President Donald Trump put up in the civil fraud case against him and his company is insufficient and should be thrown out, claiming the company that underwrote the bond hasn’t shown it has the “financial capacity” to pay it ahead of a Monday hearing on the bond’s fate.
Former President Donald Trump speaks to reporters at Manhattan criminal court on April 18.
The Washington Post
Key Facts
Trump was ordered to post a $175 million bond in the civil fraud case—only a fraction of the more than $464.2 million he and his co-defendants owe in total—after he and his associates were found liable for fraudulently misstating the value of assets on financial statements in order to obtain more favorable business deals and reflect a higher net worth for Trump.
Trump posted the $175 million bond in April, which was underwritten by Knight Specialty Insurance Company (KSIC), a California-based company chaired by billionaire Don Hankey, who told Forbes he approached Trump about underwriting the bond, rather than the other way around.
The New York attorney general’s office, which brought the fraud case, challenged the bond days after it was posted, asking for KSIC to provide more information about its financials to prove it could actually cover the full $175 million—prompting the insurance company to defend its finances in an updated filing Monday.
In a new filing Friday, the attorney general’s office argued the information KSIC provided was still insufficient because nothing about what the company provided actually shows they have the financial ability to pay the $175 million if Trump can’t—noting the company reports it’s only worth $138 million, which is smaller than the size of the bond, and alleging it is using a “shadow” company in the Cayman Islands to “appear more financially stable than it actually is.”
Trump’s collateral also has issues, the state argues, because the filing alleges Trump is using $175 million in cash to collateralize his bond—but there’s nothing suggesting that money is “locked,” meaning Trump could withdraw some of that $175 million at any time and thus wouldn’t have enough to cover the bond if he had to pay.
The state also accuses KSIC’s management, including Hankey, of being “neither trustworthy nor competent.”
Chief Critic
Trump’s lawyer Cliff Robert and KSIC have not yet responded to requests for comment. In their filing defending the bond, Trump’s lawyers and KSIC described the company as being “respected” and “well-capitalized,” arguing its “solvency and substantial financial credibility … enable it to satisfy all obligations under the bond.”
What To Watch For
Judge Arthur Engoron will hold a hearing in New York state court on Monday about the bond issues and whether the KSIC-backed bond can hold. The state has asked Engoron to declare the bond invalid and require Trump to replace it with a bond underwritten by a new company within seven days.
Forbes Valuation
$4.9 billion. That’s Trump’s net worth as of Friday afternoon, according to Forbes’ real-time tracker, as the ex-president’s assets have shot up in the wake of his company Trump Media & Technology Group going public. Only approximately $413 million of his total net worth is made up of cash and liquid assets, however, meaning that while Trump can cover the entire $175 million himself, he could not cover the $454.2 million—and counting—he’s been ordered to pay in total in the fraud case.
Key Background
Trump and his co-defendants—including his sons and former Trump Organization CFO Allen Weisselberg—were found liable in February for fraudulently inflating the value of their assets following a monthslong trial. Engoron determined there was “overwhelming evidence” showing Trump and his sons signed off on financial statements despite knowing valuations were false, ordering Trump to pay $454.2 million plus post-judgment interest—accumulating at a rate of more than $111,000 per day—on top of smaller fines for Trump’s sons and Weisselberg. An appeals court lowered the amount that Trump had to post bond for to $175 million after Trump’s lawyers protested that he couldn’t find any companies who were willing to cover the full bond amount. Trump posted the KSIC-backed bond soon after. If he loses the fraud case on appeal, he will still be on the hook for the full payment, even though he only has to pay part of it now to secure the bond.
Further Reading
MORE FROM FORBESTrump’s $175 Million Fraud Bond Could Be Invalidated If Insurance Company Doesn’t Prove It Can Cover ItBy Alison Durkee
MORE FROM FORBESTrump Posts $175 Million Bond Thanks To Billionaire Don HankeyBy Zach Everson
MORE FROM FORBESTrump Only Must Put Up $175 Million In Civil Fraud Case, Court Rules-For NowBy Alison Durkee
MORE FROM FORBESTrump’s Net Worth 2024: Which Assets Are Up, Which Are DownBy Kyle Mullins
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Forbes – https://www.forbes.com/sites/alisondurkee/2024/04/19/trumps-175-million-fraud-bond-should-be-replaced-because-company-cant-prove-they-can-pay-it-ag-argues
