NEW YORK — Lawyers for New York state and a lawyer for former President Donald Trump settled their differences Monday over a $175 million bond Trump posted to block a major civil fraud verdict while he appeals.
The agreement ended a possible daylong court hearing in Manhattan where witnesses would be present.
As part of a deal struck during a 20-minute break, Trump’s lawyers and Knight Specialty Insurance Company agreed to keep the $175 million in a cash account that will earn interest but has no downside risk. The account has grown by over $700,000 to date.
The bond prevents the state from potentially seizing Trump’s assets to pay the more than $454 million he owes after losing a lawsuit brought by the Democratic attorney general. She had alleged that Trump, along with his company and key executives, defrauded bankers and insurers by lying about his wealth.
The ex-president and presumptive Republican nominee denies the claims and is appealing the verdict.
Judge Arthur Engoron, who handed down the sweeping verdict in February after concluding that Trump and others had misled banks and insurers by overstating his wealth on financial statements, presided over Monday’s hearing and was caught in a sharp exchange at times with Trump lawyer Christopher Kise.
Engoron challenged Kise with examples of how the money Trump posted might not be available for collection if the verdict were upheld, prompting Kise to respond in one case that the judge’s “hypothetical position … is wildly speculative.”
At another point, Kise expressed frustration with the office of New York Attorney General Letitia James, saying, “It seems like no matter what we do, they’re going to find fault with it.”
But Andrew Amer, an attorney for New York state, proposed settlement terms shortly after he began speaking at the hearing. He said the state wanted additional guarantees because Trump raised the money with help from a relatively small out-of-state insurance company.
As part of the deal, Knight Specialty Insurance, a Wilmington, Delaware-based unit of the Los Angeles-based Knight Insurance Group, will have exclusive control of the $175 million and submit to the jurisdiction of New York state court while they agrees not to do that. to move the money into mutual funds or other financial instruments.
Speaking to reporters in the hallway outside Trump’s separate hush money trial, his attorney, Alina Habba, said Engoron “doesn’t even understand the basics of finance.”
“We came to an agreement that everything would be the same,” she said. “We would adjust the terms and that would be it.”
Trump also railed against Engoron, accusing him of not understanding the matter.
“He challenged the glue company that maybe the glue company was not good. Well, they’re good. And they also have $175 million in collateral – my collateral,” he said.
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AP writer Jill Colvin contributed to this story.