Trump denied delay of $454M penalty

FILE - Former President Donald Trump attends the closing arguments in the Trump Organization civil fraud trial at New York State Supreme Court in the Manhattan borough of New York, Jan. 11, 2024.  Trump's lawyers have asked a New York appellate court to halt collection of the former president's $454 million civil fraud judgment while he appeals. Trump's lawyers said in a court filing Wednesday that he is planning to post a $100 million appeal bond rather than a bond covering the full amount, which would automatically pause enforcement. (Shannon Stapleton/Pool Photo via AP, File)
FILE - Former President Donald Trump attends the closing arguments in the Trump Organization civil fraud trial at New York State Supreme Court in the Manhattan borough of New York, Jan. 11, 2024. Trump's lawyers have asked a New York appellate court to halt collection of the former president's $454 million civil fraud judgment while he appeals. Trump's lawyers said in a court filing Wednesday that he is planning to post a $100 million appeal bond rather than a bond covering the full amount, which would automatically pause enforcement. (Shannon Stapleton/Pool Photo via AP, File)

NEW YORK -- A New York appellate judge on Wednesday refused to halt collection of Donald Trump's $454 million civil fraud penalty while he appeals, leaving the former president less than a month to pay up or secure a bond covering the full amount he owes.

Judge Anil Singh of the state's mid-level appeals court rejected Trump's offer of a $100 million bond, though he did offer Trump some leeway that could help him secure the necessary bond before New York Attorney General Letitia James seeks to enforce the judgment starting on March 25.

Singh granted an interim stay pausing a provision in the Feb. 16 verdict that barred the Republican presidential front-runner, his company and co-defendants from obtaining loans from New York banks. Trump's lawyers had told the appellate court earlier Wednesday that the lending ban in Judge Arthur Engoron's decision had made it impossible for him to secure a bond for the full amount.

Trump's lawyers warned he may need to sell some properties to cover the penalty and would have no way of getting them back if he is successful in his appeal. State lawyers said those disclosures suggested Trump -- who has more than a half-billion dollars in pending court debt -- was having trouble coming up with the staggering sum he owes.

Trump told the appeals court that it was "impossible" to secure a bond of more than $450 million -- any company providing a bond would most likely require the former president to pledge cash and other collateral -- and offered to post one of only $100 million. Any bond that the appeals court accepts would prevent the New York attorney general's office, which brought the case, from collecting from Trump while he appeals.

Trump's lawyers floated their smaller bond offer in court papers as they sought an order from the appellate court preventing James' office from enforcing the judgment while his appeal plays out. Singh, sitting in the Appellate Division of the state's trial court, ruled after hearing arguments at an emergency hearing Wednesday.

In all, Trump and his co-defendants owe more than $465 million to the state. They have until March 25 to secure a stay -- a legal mechanism pausing collection while he appeals -- before they would be forced to pay the penalty or risk having some of their assets seized. Posting a bond in the full amount would trigger an automatic stay under state law.

"The exorbitant and punitive amount of the judgment coupled with an unlawful and unconstitutional blanket prohibition on lending transactions would make it impossible to secure and post a complete bond," Trump lawyers Clifford Robert, Alina Habba and Michael Farina wrote in court papers detailing the $100 million bond offer.

James' office opposed Trump's plan, saying his lawyers have all but conceded he has "insufficient liquid assets to satisfy the judgment."

"These are precisely the circumstances for which a full bond or deposit is necessary," Senior Assistant Solicitor General Dennis Fan wrote, saying Trump's offer would leave James' office and the state "with substantial shortfalls" if the verdict is upheld.

"A prevailing plaintiff is entitled to have her award secured, and defendants have never demonstrated that Mr. Trump's liquid assets could satisfy the full amount of the judgment," Fan wrote.

James, a Democrat, has said that she will seek to seize some of Trump's assets if he's unable to pay the judgment.

Financial relief might also come from a separate deal: Trump's stake in Trump Media & Technology Group, his social media company, could be worth up to $4 billion after a long-delayed merger is made final this year, though it won't be in time for James' March 25 deadline.

Engoron found that Trump, his company and top executives, including his sons Eric and Donald Trump Jr., schemed for years to deceive banks and insurers by inflating his wealth on financial statements used to secure loans and make deals.

Paperwork making the judgment official was filed on Feb. 23. That started a 30-day window for Trump to pay up or file an appeal and seek a stay.

Also Wednesday, white powder was found in an envelope addressed to Engoron at his Manhattan courthouse. Officials said preliminary testing showed it was negative for hazardous substances and no injuries were reported.

BONDS EXPLAINED

A bond, in simplest terms, is a document that a company provides to the court on a defendant's behalf. The bond company promises the court to cover a judgment if a defendant, in this case Trump, loses an appeal and fails to pay.

In exchange, Trump would have to pay the bond company a premium fee, typically anywhere from 1% to 3% of the judgment. Trump would also have to pledge collateral to the bond company, offering it cash, stocks and bonds.

Although each deal is different, companies offering appeal bonds might be unwilling to take Trump's property as collateral, especially if a building already has a mortgage, experts said.

Legal experts predicted that even if Trump loses before the five-judge appellate panel, he might still come up with a larger bond, noting that his lawyers did not characterize the $100 million bond as the only possible outcome.

The $100 million bond "resembles an opening real estate bid," said Mark Zauderer, a partner at the law firm Dorf Nelson & Zauderer who is a veteran New York business litigator and has secured many appeal bonds. "But here, the negotiation will end, because it is the court that will determine the actual dollar amount of security, not Trump."

APPEAL DETAILS

Trump filed his appeal on Monday. In their notices of appeal, his lawyers said they want the appellate court to decide whether Engoron "committed errors of law and/or fact" and whether he abused his discretion or "acted in excess" of his jurisdiction.

Trump wasn't required to pay his penalty or post a bond in order to appeal, and filing the appeal did not automatically halt enforcement of the judgment.

Trump would receive an automatic stay if he were to put up money, assets or an appeal bond covering what he owes. He also had the option to ask the appeals court to grant a stay with a bond for a lower amount -- a gambit rejected Wednesday.

Trump's lawyers argued that his vast real estate assets and oversight mandated by Engoron's ruling, including supervision of his company by an independent monitor, "would alone be sufficient to adequately secure any judgment affirmed."

The $100 million bond, they said, "would simply serve as further security."

A lawyer for Trump, Christopher Kise, did not immediately respond to requests for comment.

In seeking relief, Trump's lawyers disclosed that he would be unable to secure a bond for the full $454 million. Under New York law, a defendant also owes 9% interest to the plaintiff until the judgment is paid or the appeal resolved, meaning a full bond might reach $500 million or more.

Trump's lawyers did not ask to pause the monitor's oversight, but Singh did halt some other sanctions affecting the Trump Organization, at least temporarily.

The appellate judge paused Engoron's two-year ban on Eric and Donald Trump Jr. holding executive positions in New York corporations, meaning they can continue running the company. He also paused a similar three-year ban that applied to Trump.

Trump maintains that he is worth several billion dollars and testified last year that he had about $400 million in cash, in addition to properties and other investments.

In all, Trump has at least $543.4 million in personal legal liabilities from Engoron's ruling and two other civil court judgments in the past year.

In January, a jury ordered Trump to pay $83.3 million to writer E. Jean Carroll for defaming her after she accused him in 2019 of sexually assaulting her in a Manhattan department store in the 1990s. That's on top of the $5 million a jury awarded Carroll in a related trial last year. Trump denies her allegation.

Trump appears to be struggling to line up a bond in the defamation case as well. He has until early next month to do so, and his lawyers recently asked a judge to either grant him more time or reduce the size of the bond.

Information for this article was contributed by Michael R. Sisak and Jennifer Peltz of The Associated Press and by Ben Protess and Kate Christobek of The New York Times.

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