Donald Trump is struggling to find a private entity willing to guarantee the $464 million he has been ordered to pay in a civil fraud case in New York.
The former president faces the option of paying the entire sum in cash or securing a bond to proceed with his appeal.
Mr. Trump has stated that obtaining a bond of this size is “practically impossible.” Should he fail to make the payment, his real estate holdings risk being sold off.
A bonding company, for a fee, would guarantee the full sum to the New York court, and would be responsible for the payment if Mr. Trump loses his appeal and fails to pay.
In a statement, Mr. Trump mentioned that the requested bond amount was unfeasible for any company, regardless of success, including his own.
“The bonding companies have never heard of such a bond, of this size, before,” he said.
Mr. Trump’s legal team has spent extensive time discussing with one of the world’s leading insurance companies, as stated in a court document.
However, they’ve found that “very few bonding companies will consider a bond of anything approaching that magnitude.”
Despite approaching 30 companies, Mr. Trump’s lawyers have not succeeded.
Mr. Trump’s eldest sons are also required to pay substantial amounts in relation to this case.
New York Judge Arthur Engoron imposed a penalty on Mr. Trump for inflating asset values to secure better loan agreements and barred him from managing any New York businesses for three years.
A judge temporarily halted Mr. Trump’s business prohibition last month but refused his request to lower the bond amount to $100 million to cover the penalty.
The former president’s latest court submission includes a statement from a president of a private insurance company, highlighting the rarity of such large bonds.
“In the unusual circumstance that a bond of this size is issued, it is provided to the largest public companies in the world, not to individuals or privately held businesses,” the lawyers also said.
According to former federal prosecutor Diana Florence, Mr. Trump’s unique legal predicament makes it hard to foresee what comes next, noting that such penalties are usually levied against large corporations.
She mentioned Mr. Trump’s legal strategy has been to delay, but he may soon run out of options.
“He’s facing the very real possibility that the AG will begin to liquidate [his assets], and he’s really dependent on whether a court is willing to give him more time,” Ms. Florence said.
The New York attorney general has pledged to seize Mr. Trump’s assets if he fails to settle the fraud judgment. The penalty accrues interest of at least $112,000 daily until payment.
Mr. Trump’s legal representatives stated that bonding companies reject “hard assets” like real estate as collateral for the bond, accepting only cash or liquid investments.
Forbes estimates Mr. Trump’s net worth at approximately $2.6 billion, with him claiming $400 million in liquid assets last year.
Beyond the $464 million judgment, Mr. Trump faces an $83 million payment from a defamation lawsuit loss to E. Jean Carroll, whom he was found to have sexually abused. He has already secured a bond in that case.
