Former US president Donald Trump is due to post a bond on Monday in relation to a $464 million civil fraud judgment against him. Failing to do so will mean that Trump’s assets could be seized by the New York Attorney General.
Monday is the deadline, marking the end of a 30-day grace period granted to Trump after a New York court had delivered its ruling.
According to CNN, Trump’s legal team and the New York Attorney General’s office have been working hard to secure the bond to cover the multimillion-dollar fraud judgment against the former president.
According to the report, Trump personally owes more than $454 million, but the figure could actually stand at about $464 million if the money owed by Trump’s sons, Eric and Donald Jr, the Trump Organization, and the accrued interest since the date of the February ruling are included.
What happens if Trump can’t secure the bond?
Citing experts, the CNN report said that the New York Attorney General could start the process of seizing Trump’s assets if he fails to secure the bond needed to cover the February ruling, even as the former president appeals.
Assets, including buildings, houses, cars, helicopters, and even Trump’s plane, could be targeted.
However, according to the experts CNN spoke to, the main focus would be on Trump’s bank accounts, which would be easier to seize than properties.
For this reason, these experts believe that the first action taken against Trump, if he fails to secure the bond, will likely be the seizing of his bank accounts.
However, these experts caution that the overall process will be a “complicated legal maze”.
According to the CNN report, the New York Attorney General’s office is already laying down the groundwork to seize Trump’s golf course in Briarcliff Manor, New York State, as well as the former president’s private estate known as Seven Springs, a 230-acre property also located in New York State.
A Financial Times report also highlights that seizing Trump’s property will be more complicated because most of his buildings are held by limited liability companies — a fact that could allow Trump to delay proceedings against him by claiming that he cannot unilaterally hand the assets over.
However, the Financial Times does point out that the New York Attorney General could have an easier time taking over items within Trump’s properties, such as art.
There are some exceptions, like the fact that Trump would still be permitted to keep at least one motor vehicle that is not worth over four thousand dollars and any bibles owned by him, but these are likely to provide limited relief.
For his part, Trump has approached a state appeals court, asking it to allow him to post either a smaller bond or none at all. Trump has claimed that he will face irreparable damage if he is forced to sell properties in a fire sale, which can’t be rolled back even if he eventually wins his appeal.
However, the court had not yet ruled at the time of filing this story.
How much will the bond cost Trump?
As explained by the Financial Times, a surety bond guarantees that a defendant, Trump in this case, can pay a legal judgment if their appeals fail.
It is commonplace for the insurers involved to demand collateral amounting to 100 per cent of the judgment, or even more, and that too in cash or highly liquid securities, instead of real estate.
According to the Financial Times, Trump will need to cough up $570 million in collateral, amounting to 120 per cent of the judgment.
Then there is the upfront fee of 1 per cent to 3 per cent for the underwriter, which would amount to $18.5 million and would not be returned to Trump even if he were to win his appeal.
How much cash does Trump actually have?
Trump claimed on Friday that he had almost half a billion dollars in cash, but said he’d rather spend the money on his presidential run than on the civil fraud judgment against him.
However, Trump didn’t provide any documentation for his claim.
On Thursday, Trump’s lawyers had reportedly said in court filings that they were facing difficulties in obtaining a bond covering the judgment because underwriters were insisting on cash, stocks or other liquid assets as collateral, instead of real estate.
The lawyers reportedly said that over 30 bonding companies had rejected their requests.
In his Friday post on his Truth Social platform, Trump suggested that he had enough cash to cover the judgment in full. Through hard work, talent, and luck, I currently have almost five hundred million dollars in cash, he wrote in all caps, adding that he had planned to use a considerable portion of this amount on his presidential run.
However, this appeared to be the first time that Trump has suggested that he would contribute to his own 2024 campaign.
Recently, Trump also had to secure a nearly $92 million bond to cover the judgment against him in a defamation case as he appeals.
Can Truth Social save Trump?
According to the Financial Times, Trump could benefit from a potential windfall of $3 billion or more with shareholders having approved a plan to take his social media company, Truth Social, public through his Spac.
But, as the report points out, there is a lock-up agreement that will prevent Trump from selling his shares for a six-month period.
Experts have also told the Financial Times that there is no way to figure out the actual valuation of the company, meaning that anyone who accepts the company as collateral “will have to assess the risk”.
What are Trump’s options?
According to CNN, if the appeals court Trump has approached does not cut down the amount he must pay or pause the judgment, bankruptcy could be one option.
But, according to the report, that’s one option the former president would be loath to take.
Broadly speaking, experts have told CNN that Trump’s two options are to either go into bankruptcy or get a bond.
Trump could also try and sell his smaller properties to satisfy the debt.
However, according to an expert quoted by the Financial Times, Trump could still pledge a combination of cash, shares and other assets as collateral.