Donald Trump, the former President, asserts that his brand alone holds a value exceeding $10 billion; however, legal experts suggest that a pair of civil verdicts could wreak financial havoc for him.
Last month, Trump faced an $83 million award in the E. Jean Carroll defamation case, and he anticipates another potentially larger verdict in the coming days.
These verdicts, combined, could deliver a significant blow to his finances, affecting both his personal wealth and the Trump Organization.
Trump guarded by security men (Credits: Brookings Institution)
Chris Mattei, an attorney experienced in handling similar cases, highlights that this combination would be a “devastating financial blow” for Trump, potentially having a significant impact on his overall wealth.
Trump’s campaign spokesman, Steven Cheung, dismisses the verdicts as “witch hunts,” and Trump plans to appeal the decisions.
The first case involves an $83.3 million verdict in the E. Jean Carroll defamation case. Trump plans to appeal, but the appeal process doesn’t exempt him from the financial obligation.
While the appeal progresses, Trump must provide security for the award. For the previous $5 million verdict against him, he had to deposit $5.5 million into a court fund. The appeal process incurs an annual interest rate of 9%, adding financial pressure.
In another case, the New York Attorney General’s civil fraud case seeks damages of $370 million for “repeated fraud” related to Trump’s financial statements. A decision from Judge Arthur Engoron is imminent, and if unfavorable, Trump plans to appeal.
However, an appeal would still require Trump to provide security or a bond, incurring substantial costs.
The financial implications are substantial. For instance, if Trump were to seek a bond for the $370 million verdict, it could cost up to an $18 million nonrefundable fee to the surety company, with additional costs due to the 9% interest rate.
Trump’s financial standing, as per a 2021 statement of financial condition, indicates close to $293.8 million in “cash and cash equivalents,” with a net worth of $4.5 billion. However, the accuracy of these figures is disputed.
The Trump Organization, comprising 415 distinct business entities, faces dissolution orders as part of the New York Attorney General’s lawsuit.
This could have cascading effects, triggering defaults on properties with outstanding loans and potentially leading to a complex financial web.
As Trump faces legal and financial challenges, questions arise about his ability to use campaign funds for legal obligations. Trump has utilized political action committees to fund legal expenses, but the extent of using campaign money for personal judgments remains uncertain.
The potential financial repercussions for Trump and his organization underscore the complexity and interconnection of legal, political, and financial factors.
The outcomes of ongoing legal battles will likely shape Trump’s financial landscape, impacting both his personal fortune and the Trump Organization’s stability.
