Donald Trump gestures during a hearing on charges of falsifying business records to hide hush money paid to a porn star before the 2016 election in New York State Supreme Court in Manhattan, New York, on February 2. Former president. 15th, 2024.
Andrew Kelly Reuter
Former President Donald Trump is preparing to fight for a huge fine in a New York corporate fraud case. threaten That’s to erase most of the cash he says he has on hand.
But first he needs to secure a bond, which may not be so easy.
President Trump was fined about $355 million and more than $98 million in interest on Friday after a judge found the former president was guilty of fraud for manipulating financial statements he provided to lenders. ordered to pay. Each day, the accrued interest adds $87,502 to Trump’s bill.
If Trump does not want to pay the full fine while an expected appeal is considered, he will be required to post an appeal bond. Typically, this will be his 120% of the judgment amount plus current interest.
As things stand, President Trump’s original interest-bearing judgment indicates he will need to secure more than $540 million worth of bonds. However, it is unlikely that a real estate mogul will be able to use his real estate as collateral.
“Putting real estate as collateral is not very attractive,” said Neil Pedersen, owner of New York-based surety bond agency Pedersen & Sons.
Pedersen said President Trump may have to sell some assets to secure the bonds. Bond companies also plan to charge fees that could total millions of dollars.
An appeal against Judge Arthur Engoron’s ruling could take years.
Flags supporting former President Donald Trump outside Trump Tower in New York on October 1, 2023.
Yuki Iwamura | Bloomberg | Getty Images
Another complicating factor is Trump’s status as the front-runner for president.
Pedersen said this is an “unprecedented” situation for potential bond companies.
“No one has ever had to force a compensation agreement on someone who is very likely to be the next president of the United States,” he said.
Mr. Trump has vowed to appeal Mr. Engoron’s ruling, a move that would destroy not just his earnings but his entire persona as a billionaire business genius that he has carefully cultivated over the decades. It’s threatening.
But bond agents may be hesitant to work with Mr. Trump. Trump’s claims about his business practices and wealth are being challenged in court.
An appeals bond is used to ensure that a person ordered to pay a judgment does not abuse the court to delay or avoid payment.
“No matter who forms the bond, [Trump] “They’re committed to getting that decision right. Who would do that?” said David Slarsky, a New York business lawyer.
President Trump said in a speech: deposition Last year, he said he had “substantially more than $400 million in cash,” which he technically had to deposit with him, along with the entire amount of the judgment against him, plus interest, when he challenged the judgment. will be possible. However, his lawyers have already said they will secure his bail.
Trump’s lawyer, Alina Haba, told Fox News on Monday that “the full amount and a portion of the bond must be posted.”
“We are ready to do that,” she said.
Haba said he plans to post about $400 million in bond within 30 days to file a notice of appeal, which will begin after the court clerk issues Engoron’s final judgment.
Mr. Engoron also prohibited Mr. Trump from operating a business in New York or applying for a loan from any financial institution registered with the state for three years.
Haba also appeared to brush off questions about whether President Trump would have to sell his New York real estate assets as his legal problems deepen.
But Pedersen warned that doing so could cause “headaches” in itself.
Because these assets are illiquid, the process of converting them into cash could be difficult if Trump loses his appeal, perhaps in a case centered on a dispute over the value of Trump’s estate. It will become even more difficult.
Haba did not immediately respond to CNBC’s questions about the process of securing an appeal bond.
Mr. Engoron’s ruling in Manhattan Supreme Court came weeks after a jury in a separate civil case in New York federal court ordered Mr. Trump to pay $83.3 million for defaming author E. Jean Carroll. . This is on top of the $5 million that Trump has already been ordered to pay in a separate defamation lawsuit filed by Carroll.
After the case was decided, the former president took the unusual step of setting aside a $5.6 million cash deposit while he pursued his appeal.
George Conway, a Trump critic and lawyer, suggested that Trump was unable to secure appeal bond from a third party. Mr. Trump’s lawyers denied this, saying Mr. Trump simply wanted to avoid additional fees imposed by bond companies.
But as President Trump’s legal fines soar to more than $500 million, Slasky and others predicted that Trump might soon declare bankruptcy.
Forbes estimated Trump’s net worth as follows: Approximately $2.6 billion As of February.
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