Donald J. Trump on Wednesday lost his first attempt to have a New York appeals court stay the more than $450 million judgment he faces in a civil fraud case, a decision that could expose yourself to financial peril.
Mr. Trump’s lawyers had asked the appeals court to allow him to post only a $100 million bond — a promise from an outside company that the judgment would ultimately be paid — because it was «impossible.» to get one for the full amount, they said.
A single appeals court judge reviewing Mr. Trump’s request, Anil Singh, rejected it on Wednesday. Mr. Trump will try again next month with a five-judge appeals court panel, but for now the former president still must post bail totaling more than $450 million. And any company that provided one would likely require him to commit cash and other collateral that he doesn’t yet have.
If Mr. Trump fails to secure bail, the New York attorney general’s office, which filed a lawsuit accusing him of fraudulently inflating his net worth, will be able to recover the $454 million from him. Attorney General Letitia James is expected to grant Mr. Trump a 30-day grace period, which expires on March 25, after which she could move quickly to seize Mr. Trump’s bank accounts and possibly take control of his New York. properties.
The $454 million judgment was handed down by the trial judge in the fraud case, Arthur F. Engoron, who also imposed a series of other sanctions on Mr. Trump and his family business. They include a ban on getting a loan from a New York bank for three years and a ban on running a business in the state for that same period, restrictions that complicate Mr. Trump’s efforts to obtain a caution.
“The exorbitant and punitive amount of the judgment, coupled with an illegal and unconstitutional blanket ban on loan transactions, would make it impossible to obtain and post a full bond,” Mr. Trump’s lawyers wrote to the court. call.
Justice Singh also suspended these sanctions on Wednesday, which could make it easier to obtain bail for the full amount.
Financial relief could also come from a separate deal: Mr. Trump’s stake in Trump Media & Technology Group, his social media company, could be worth as much as $4 billion after a long-delayed merger is finalized final this year, but not in time for the March 25 deadline set by Ms. James.
In its own filing, Ms. James’s office asked the appeals court to reject Mr. Trump’s request.
“There is no basis for Defendants’ contention that a full bond or deposit is not required because they are willing to post a partial bond of less than one-fourth of the judgment amount,” the attorney general’s office wrote. “Defendants virtually admit that Mr. Trump does not have sufficient cash to satisfy the judgment.”
Mr. Trump’s lawyer, Christopher M. Kise, did not immediately respond to requests for comment.
Regardless of the resolution of the case, Mr. Trump’s request for relief represents a humble concession from a man whose public image is synonymous with wealth. His remarkable displays of gold-plated luxury supported his rise to tabloid fame, a stark contrast to the current spectacle of his struggle to avoid financial problems.
Ms. James built her case on the accusation that Mr. Trump fraudulently inflated her net worth by as much as $2 billion. He did this, Ms. James argued, to obtain favorable loans and other financial benefits.
Judge Engoron sided with Ms. James, concluding that Mr. Trump defrauded his lenders, who expected him to maintain a certain net worth.
Mr. Trump’s net worth comes largely from real estate, and the sum of the judgment in the civil fraud case and the $83.3 million judgment he faces in a lawsuit in libel involving writer E. Jean Carroll eclipses his stockpile of cash.
Last year, Mr. Trump had more than $350 million in cash, as well as stocks and bonds that he could sell in a hurry, according to a recent review of his financial records by The New York Times .
Mr. Trump also appears to be struggling to set bail in the defamation case. He has until early next month to do so, and his lawyers recently asked a judge to either give him more time or reduce the bail amount.
A bond, simply put, is a document that a company provides to the court on behalf of a defendant. The bond company promises the court to cover a judgment if a defendant, in this case Mr. Trump, loses his appeal and doesn’t pay.
In exchange, Mr. Trump would have to pay the bond company a premium, typically between 1 and 3 percent of the judgment. Mr. Trump is also expected to give guarantees to the bond company, offering it cash, stocks and bonds.
Although every transaction is different, companies offering call bonds may not be willing to take Mr. Trump’s property as collateral, especially if a building already has a mortgage, experts said.
Legal experts have predicted that even if Mr. Trump loses before the five-judge appeals panel, he could still propose a higher bail, noting that his lawyers have not called the $100 million bail a only possible outcome.
“The $100 million bond looks like an opening real estate deal,” said Mark Zauderer, a partner at the law firm Dorf Nelson & Zauderer, a seasoned New York corporate litigator who obtained numerous bails on appeal. “But here the negotiations will end, because it is the court that will determine the real amount of the guarantee, not Trump.”