Trump could learn Monday how NY wants to collect $457M owed in his civil fraud case
NEW YORK — Former President Donald Trump could find out Monday how New York state plans to collect the more than $457 million he owes in his civil business fraud case, even as he appeals the verdict that led to the massive debt.
After state Attorney General Letitia James won the verdict, she sought to keep it from being enforced during a legal timeout for Trump to ask an appeals court for a stay.
That period ends Monday, although James could decide to give Trump more time. The presumptive Republican presidential nominee has tried to avoid having to post a bond for the entire amount to delay collection while he appeals, but the courts have so far said no.
James, a Democrat, told ABC News last month that if Trump doesn’t have the money to pay, she would try to seize his assets and was “prepared to make sure the judgment is paid.”
She gave no details about the process or specified which holdings she was referring to, and her office has recently declined to discuss her plans. In the meantime, it has notified the judgment, a technical step towards possible recovery.
Seizing assets is a common legal option when someone does not have the money to pay a civil penalty. In Trump’s case, potential targets could include his Trump Tower penthouse, airplanes, Wall Street office building or golf courses.
The attorney general could also go after his bank and investment accounts. Trump claimed on social media on Friday that he has nearly $500 million in cash but plans to use much of it during his presidential campaign. He has accused James and New York Judge Arthur Engoron, both Democrats, of trying to “take the money away so I can’t use it for the campaign.”
One possibility would be for James’ office to go through legal proceedings to have local police seize property and then sell it. But that is a complicated prospect in Trump’s case, notes Stewart Sterk, professor of real estate law at the Cardozo School of Law.
“Finding buyers for assets of this size is something that doesn’t happen overnight,” he said, noting that in any regular auction “the chance that people can bid up to the real value of the property is quite large. thin.”
Trump’s guilt stems from a months-long civil trial last fall over state allegations that he, his company and top executives vastly inflated his wealth in financial statements, defrauding bankers and insurers who did business with him. For years, the statements valued his penthouse as if it were, for example, almost three times its actual size.
Trump and his co-defendants denied any wrongdoing, saying the statements actually downgraded his fortunes, contained disclaimers and were not taken at face value by the institutions that loaned or insured him. According to him, the discrepancy between the penthouses was simply a mistake by subordinates.
Engoron sided with the attorney general and ordered Trump to pay $355 million, plus interest that accrues daily. Some co-defendants, including his sons and company vice presidents, Donald Trump Jr. and Eric Trump, were ordered to pay much smaller amounts.
Under New York law, filing an appeal generally does not stay enforcement of a judgment. But there is an automatic pause if the person or entity posts a bond that covers what is owed.
The ex-president’s lawyers have said it is impossible for him to do that. They said the insurers wanted 120% of the judgment and would not accept real estate as collateral. That would mean tying up more than $557 million in cash, stock and other liquid assets, leaving Trump’s company with some left over to run the business, his lawyers say.
Trump’s lawyers have asked an appeals court to freeze the debt collection without him posting bond. The Public Prosecution Service has objected.