Donald Trump’s lawyers argued to a judge that their client has not been able to raise the appeal bond to avoid collecting a judgment. He still has six days left.
It’s the moment of truth for Donald Trump.
In six days, the former US president must secure an appeal bond of approximately $500 million in his civil fraud case in New York, a possibility that was called into question on Monday.
In court papers, Trump’s lawyers revealed that he had been unable to obtain an appeal bond despite making “diligent efforts,” which included approaching about 30 bail bond companies.
Although Trump this month managed to post a $91.6 million bond in his defamation case against writer E. Jean Carroll, after securing a last-minute settlement from a large insurance company, he lacks the assets necessary to secure much collateral. higher in the case of fraud.
If he fails to post bail by March 25, Trump would face potential financial disaster and public humiliation. The New York attorney general, who brought the fraud case, would be authorized to collect the US$454 million and could try to seize her New York property or freeze her bank accounts.
And Trump’s economic problems go far beyond New York. As the likely Republican presidential nominee, he is coming under increased pressure to raise money to finance his campaign, trailing his opponent, President Biden, in fundraising.
Here’s what we know about Trump’s financial problems:
Why does Trump owe so much money?
Attorney General Letitia James took Trump to trial last fall and accused him of fraudulently inflating the value of his assets to obtain favorable loan terms.
Trump lost, and Judge Arthur Engoron imposed a judgment of $355 million plus interest, which amounted to $454 million. Although James could have proceeded to collect immediately, he offered a 30-day period, which ends on March 25.
Trump must now pay the full sentence while he appeals. He can raise the money himself or, more likely, obtain a bond from a company that he would agree to pay if Trump lost his appeal and defaulted.
For bail of this amount, Trump would have to leave a significant amount of collateral — up to $557 million, according to his lawyers — including as much cash as possible, as well as any stocks and bonds he could quickly sell.
You would also have to pay the surety company a commission that could amount to US$20 million.
Do you have money to pay it?
Short answer: no.
Although Trump has long flaunted his wealth, his true financial situation remains a mystery. According to a recent analysis by The New York Times, Trump had more than $350 million in cash, but most of the rest of his money was invested in real estate.
In other words, it is not liquid enough to provide the collateral required for a bond of this size.
And today you have less cash than you did a week ago. Trump had to post bail of US$91.6 million in the defamation case he lost against E. Jean Carroll. To secure that amount, Trump most likely had to pledge more than $100 million in collateral to Chubb, the insurance company that provided the bail.
And now that?
Trump has appealed the $454 million sentence and asked a New York high court to suspend it or accept a lower bail of $100 million. James could also allow additional time for Trump to pay or show leniency to the former president by offering a counterproposal.
He could appeal to the state’s highest court, quickly sell an asset or seek the help of a wealthy supporter.
And if all else fails, as a last resort, you could cause the corporate entities involved in the fraud case to declare bankruptcy, which would automatically stop the judgment against them.
But Trump is likely to resist filing for bankruptcy.
If none of these options occur before March 25, and Trump misses the deadline, James would be free to collect the money owed to the state.
Could Trump use campaign money to pay James?
Probably not.
A super PAC that supports his candidacy can raise unlimited amounts, but is legally prohibited from coordinating with him and cannot pay the judgment.
And while the former president has used a political action committee under his control to pay lawyers and witnesses in his legal cases, that group lacks the kind of money needed to meet the $454 million fine.
He is now struggling to raise money for his campaign as he faces a significant financial disparity with his election opponent, Biden. Biden’s campaign recently announced that it had entered March with $155 million in cash. While Trump’s operation has not released a more recent total, between his campaign account and the Republican National Committee, there was about $40 million at the end of January.
What else happens on March 25?
Trump also has a crucial hearing in his criminal case in Manhattan, which could be the first prosecution of a former US president.
Manhattan District Attorney Alvin Bragg filed charges against Trump accusing him of covering up a sex scandal involving a porn star to bolster his 2016 presidential campaign. The case now goes to trial.
Jury selection was initially scheduled for March 25, but the trial was delayed late last week following the disclosure of more than one hundred thousand pages of records that had been in the possession of federal prosecutors.
Although the documents have already been handed over, the trial was postponed until mid-April to give Trump’s lawyers time to review the documents.
Judge Juan Merchan set a March 25 hearing to determine whether the trial should be delayed further and to rule on Trump’s request to have the case dismissed.