Trump’s $175 million bond should be DISMISSED in fraud trial because insurance company failed to properly ‘back’ it, New York Attorney General Letitia James tells judge
- AG’s office says Knight Specialty Insurance Company has failed to guarantee it can repay $175 million bond
- James’ office is asking Trump to set up a replacement bond within seven days of his ruling
The New York Attorney General’s office asked a judge to void the $175 million bond secured in the New York civil fraud case.
In a filing on Friday, AG Letitia James’ office said Trump and other defendants in the case have failed to show there is sufficient identifiable collateral to support the bond.
The lawyers asked Judge Arthur Engoron to require Trump and other defendants to post a substitute bond within seven days of ruling on the matter.
It comes after the James earlier this month raised doubts about the “adequacy” of the $175 million bond issued as Trump continues to appeal his fraud case in New York.
New York Attorney General Letitia James’ office asked judge to reject Trump’s $175 million bond in civil fraud case
Trump will appear in court on Friday for a separate case. The ex-president was found to have inflated the value of his assets to get more favorable loans in the New York civil fraud case and had to post a $175 million bond while he appealed.
Rather than Trump selecting a large national insurance company licensed in New York, he instead chose the Knight Specialty Insurance Company (KSIC) “a small insurer not authorized to do business in New York and thus not regulated is’. by the state insurance department.”
It said the company has a total surplus for policyholders of just $138 million Trump and KSIC failed to justify KSIC as guarantor ‘for this extraordinarily large undertaking’ for a number of reasons.
Earlier this month, James raised doubts about the “adequacy” of the $175 million bond issued by California billionaire Don Hankey’s company as the clock ticked on Trump’s deadline to post the bond in the case.
As time ran out, James indicated her office was prepared to seize Trump’s assets. The ex-president’s lawyers told the court he had difficulty finding a company willing to secure an even larger bail of $464 million.
Hankey told DailyMail.com that he approached Trump after hearing about his efforts to obtain a bond for a larger judgment, and then issued the bond for the smaller amount after Trump’s team got back to him.
Billionaire Don Hankey is known as the “king of the subprime auto loan.” Trump’s occupational bond was provided by Hankey’s Knight Specialty Insurance Company
James gave Trump’s lawyers another 10 days earlier this month to “justify” the bond, saying she wanted assurances the company could meet its obligation to support or pay for it if Trump defaults if he would lose his appeal to the court.
KSIC provided the court with a financial statement as of December 31, 2023 showing assets of $539 million and a “policyholder surplus” of $138 million.
In the filing on Friday, the attorney general’s office argued that it had failed to meet the obligation to show that there is sufficient collateral to support the bond, and said the court did not consider the financial summary of Knight Insurance may be relied upon as evidence.
The New York Attorney General’s office also said Knight Insurance is not qualified to act as guarantor because federal authorities have previously found that management has run companies in violation of federal law several times in recent years legislation.
A hearing on the bond dispute is expected to take place on Monday.
It comes as opening statements are also set to begin on Monday in Trump’s separate hush-money criminal trial.