The New York Attorney General’s office has requested a judge to invalidate a $175 million bond posted by former President Donald Trump in his civil business fraud case. The AG’s office argues that Trump and other defendants failed to show sufficient identifiable collateral to back the bond. The surety company used by Trump, Knight Specialty Insurance Company, is not authorized to do business in New York and has little policyholder surplus. The filing opposes a joint motion by Trump and the insurer to justify the bond.
Lawyers for AG Letitia James have asked Judge Arthur Engoron to require Trump and other defendants to put up a replacement bond within seven days of ruling on the issue. The lawsuit against Trump led to a massive civil judgment against him, with Engoron finding him liable for fraud in February. Trump, the Trump Organization, and other defendants were found to have falsely inflated the value of real estate assets to boost Trump’s net worth and secure better financial terms. Trump personally was ordered to pay $454 million in damages and is appealing the verdict.
Trump is appealing the judgment, but under New York law, he was required to post a bond to guarantee the judgment while the appeal is ongoing. The AG’s office is challenging the legitimacy of the bond posted by Trump, citing concerns about the surety company’s lack of authorization to do business in New York and its limited policyholder surplus. A hearing on the bond dispute is scheduled for Monday, where Judge Engoron will consider the arguments made by both parties.
The AG’s office argues that there is not enough identifiable collateral to back the bond posted by Trump and challenges the legitimacy of Knight Specialty Insurance Company as the surety company. The small insurer, which has never before written a surety bond in New York or any other jurisdiction in the past two years, has a total policyholder surplus of just $138 million. The filing by the AG’s office opposes the joint motion by Trump and the insurer to justify the bond and calls for a replacement bond to be put up within seven days.
The lawsuit against Trump and other defendants alleged that they had engaged in fraudulent practices by inflating the value of real estate assets to benefit financially. The judgment against Trump included damages of $454 million, which continues to grow with interest. Trump is appealing the verdict, and the dispute over the bond posted by him is ongoing. The hearing on the bond dispute is scheduled for Monday, where Judge Engoron will decide whether Trump and other defendants need to provide a replacement bond that meets the AG’s office’s requirements. Stay tuned for updates on this developing story.
