Trump Fails to Secure Bond in Civil Fraud Case

By Staff, Agencies

Former US President Donald Trump faces mounting challenges in his legal battles as his lawyers inform a New York appeals court that they have been unable to secure a $464 million bond to cover the judgment against him in the civil fraud case brought by New York Attorney General Letitia James.

According to Trump’s legal team, the ex-president has approached 30 insurance underwriters in an attempt to secure the bond, which is required by the end of the month. However, they have encountered significant difficulties, with very few companies willing to consider a bond of such magnitude.

The judgment, including interest, exceeds $464 million, with Trump himself ordered to pay $454 million, while an additional sum includes disgorgement for his adult sons, Don Jr. and Eric. Despite efforts to secure the bond, Trump's lawyers have faced setbacks, with insurance broker Gary Giulietti testifying that obtaining a bond in the full amount is “a practical impossibility”.

One of the major hurdles Trump faces is that potential underwriters are demanding cash to back the bond, rather than accepting properties. Trump's legal team has argued for a delay in posting the bond until the appeals process is concluded, citing the substantial value of Trump's properties, which they claim far exceed the judgment amount.

Last month, Trump was ordered to pay $355 million in disgorgement by New York Judge Arthur Engoron, who found Trump and his co-defendants liable for fraud, conspiracy, and issuing false financial statements. The ruling stemmed from allegations that the defendants fraudulently inflated the value of Trump's assets to obtain more favorable loan and insurance rates.

While Trump is appealing the decision, he must post a bond to prevent the state from enforcing the judgment during the appellate process, which could extend over several years. Trump previously posted a $91.6 million bond as part of his appeal in the defamation case brought by E. Jean Carroll.

However, Giulietti noted that major underwriters have internal policies limiting them from securing bonds exceeding $100 million. Moreover, none of them are willing to accept real estate as collateral, further complicating Trump's efforts to secure the bond.

Alan Garten, the top legal officer of the Trump Organization, emphasized the significant obstacle posed by the lack of underwriters willing to accept real estate, citing Chubb's inability to do so in underwriting Trump's previous bond.