What Happens If Trump Can’t Pay His Bond?

Trump Bond Explainer

Throughout his career, Donald Trump has made his vast wealth a central component of his public image. He could use a little more of it this week. The former president is currently struggling to pay off a mountain of legal expenses tied to the seemingly endless parade of court cases he’s contending with as he vies to reclaim the White House.

Trump is scrambling to gather the $464 million he needs to launch an appeal against a New York civil court ruling that found him liable for years of financial fraud against investors and the state.. It’s not going well. Dozens of backers have declined to help him front the money, and the deadline to come up with the bond is now just days away. 

Long before the latest developments, Trump had grown concerned that if the civil fraud trial didn’t go his way, New York’s government would attempt to seize some of his prized assets. Sometimes, his concern or anger over the prospect — which now seems realer than ever before — was expressed with a mix of disbelief. “Can they really do that?” was a popular question from Trump in the earlier years of his post-presidency, when privately discussing his legal options and the New York attorney’s probe and civil case, a person close to Trump tells Rolling Stone.

At times, the former president would fume about how supposedly “illegal” and unconstitutional it would be for the state of New York to do that to him, before segueing into musing about how much he and his company had done for New York over the decades, this person adds.

Within the past year, the former president has repeatedly asked people close to him if there are any novel strategic or legal moves he could make to soften the blow or further “protect” his business empire. According to an attorney who’s repeatedly discussed the situation with Trump and another source familiar with the matter, one of the things he’s quizzed some of his longtime associates on is whether the Trump Organization would be protected if assets or operations were moved to a different state, potentially Texas. Trump has been told that this is not legally feasible at the time, nor would it be a productive or practical gambit in this New York case.

He doesn’t have many other options, either. As the clock runs down on Trump’s appeal deadline, the situation could get really messy, really fast. Here’s everything you need to know about the presumptive Republican presidential nominee’s appeal bond fiasco — which could result in Trump losing some of his most iconic properties. 

What is an appeal bond?

Civil and criminal litigation can take months or years to reach its resolution. While a trial can feel like the end of a case, there’s often a lengthy appeals process that takes place after, in which parties can challenge the outcome or decisions made in the case. 

An appeal bond is a commonly used mechanism in which a court demands that a defendant assure they can pay any monetary penalties leveled against them before they accept their appeal. It basically guarantees that should the defendant lose the appeal — or go bankrupt in the process — they have the money to settle their debt. It also protects the courts from frivolous appeals and stalling tactics by defendants who don’t want to pay. 

Usually, this is done through a surety insurance company, which agrees to pay the amount owed if the defendant can’t. The surety firm will typically require the defendant to put up assets as collateral should they lose, and the court will typically tack on a percentage of interest on the initial amount. 

What is Trump’s $464 million bond for?

Last month, Trump was ordered to pay $355 million in damages to the state of New York and barred “from serving as an officer or director of any New York corporation or other legal entity in New York for a period of three years,” after being found liable for defrauding investors and the state through years-long manipulations of the value of his real estate holdings.  

Trump made clear even before his trial concluded in February that he would appeal the judgment and awarded damages. The court has requested a $464 million appeal bond — about 130 percent of the amount owed — in order to submit his appeal. 

Trump’s legal team revealed on Monday that “despite scouring the market, we have been unsuccessful in our effort to obtain a bond for the Judgment Amount.” The deadline for Trump to put up the money and appeal the verdict is Monday. 

If Trump is a billionaire, why can’t he afford to pay his bond?

Like many uber-rich people, most of Trump’s assets are tied up in his various companies, investments, and real-estate holdings. He probably doesn’t have nearly half a billion dollars just sitting in his checking account. He also, as proven in the New York civil fraud case, has a history of inflating his net worth. 

The former president’s lawyers wrote in their Monday filing that 30 underwriters declined to back the bond, likely because either they think he’s going to lose, or because Trump can’t put up enough collateral. His lawyers have also have indicated that Trump might be forced to sell off properties and assets in order to make the payment. 

On Tuesday, Trump raged at the possibility of having to sell properties to come up with the money, complaining that he would “be forced to mortgage or sell Great Assets, perhaps at Fire Sale prices, and if and when I win the Appeal, they would be gone.” 

Trump’s campaign has been footing a lot of the former president’s legal bills, but their coffers are nowhere near deep enough to foot a payment of this size. The campaign could also run afoul of election finance laws as an appeal bond in a civil frail lawsuit is unlikely to meet the criteria for an authorized campaign expenditure. 

Trump claimed on Friday, however, that he does have enough cash to cover the bond, despite his lawyers claiming there was no way he could cover it. “THROUGH HARD WORK, TALENT, AND LUCK, I CURRENTLY HAVE ALMOST FIVE HUNDRED MILLION DOLLARS IN CASH, A SUBSTANTIAL AMOUNT OF WHICH I INTENDED TO USE IN MY CAMPAIGN FOR PRESIDENT,” he wrote, alleging the judgement against him was designed to hamstring his presidential chances.

Did Trump actually start a GoFundMe to raise money for his bond?

He did not. In the aftermath of the court’s $355 million ruling, supporters of the former president opened a GoFundMe to pay off Trump’s debt. As of March 21, it has only raised $1.6 million of its $355 million goal. 

While Trump didn’t personally set up the GoFundMe, he has been pleading with his supporters to help him pay the damages. On Wednesday, his campaign sent out a text blast calling on his fans to help him keep the state of New York’s “​​FILTHY HANDS OFF TRUMP TOWER!” 

“Before the day is over, I’m calling on ONE MILLION Pro-Trump patriots to chip in and say: STOP THE WITCH HUNT AGAINST PRESIDENT TRUMP!” the donation page read.  

How long does Trump have to come up with the money for the bond?

Defendants are typically given a 30-day grace period to sort out their assets and make any necessary financial adjustments before the court begins collecting on penalties. For Trump, that deadline expires on Monday, March 25.

What happens if Trump can’t come up with the money by the deadline or the appeals court doesn’t rule in his favor?

If Trump can’t come up with the money by Monday, there are still some last-ditch maneuvers he can attempt to try and buy more time — or to avoid personally footing the bill. These include asking the court to stay the enforcement of the verdict, appealing to private benefactors to loan him cash, or even declaring bankruptcy. 

With an extension, Trump can cast a wider net for potential guarantors, or even wait for the massive financial windfall he expects from his efforts to take his social media company –-  Truth Social — public. 

If the court declines to extend the grace period, Trump’s appeal efforts will likely crumble, and the state can begin taking steps to collect what they’re owed.  

Can the state seize his assets?

Yes, and New York Attorney General Letitia James has stated she has no qualms about doing it. If Trump can’t pay up, the state can confiscate all manner of his properties and luxury purchases in order to satisfy the court’s ruling. 

“If he does not have funds to pay off the judgment, then we will seek judgment enforcement mechanisms in court, and we will ask the judge to seize his assets,” James told ABC News last month.   

James may already be laying the groundwork for a forfeiture. On Thursday, Bloomberg reported that the state has registered Trump’s judgment in Westchester County, the seat of the Westchester Trump National Golf Club, and near three other golf courses he has in New York and New Jersey. 

How is Trump reacting to all this?

Poorly. The former president has been raging on social media for days. 

On Thursday, Trump wrote on Truth Social: “Even though I did nothing wrong, a Radical Left New York Judge, a true Trump Hater, Arthur Engoron […] picked a number out of THIN AIR, $355,000,000, plus interest […] & wants me to bond it, which is not possible for bonding companies to do in such a high amount, before I can even Appeal. That is CRAZY!” 


“Putting up money before an Appeal is VERY EXPENSIVE. When I win the Appeal, all of that money is gone, and I would have done nothing wrong,” he added.

The lengthy post came amid days of fretting over the reality of his efforts to worm his way out a massive bill to the state of New York are on the verge of collapsing.

Source link: https://www.rollingstone.com/politics/politics-features/what-happens-if-trump-cant-pay-bond-1234992244/

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