The $175 million bond posted by Donald Trump in New York last week seemed to offer temporary relief, halting the enforcement of the $460 million judgment in his civil fraud case pending appeal. However, New York Attorney General Letitia James raised concerns about the sufficiency of the bond, giving Trump and the bond provider, Knight Specialty Insurance Company, 10 days to justify it.
Experts suggest that James’ skepticism stems from her history of litigating cases involving Trump’s dishonest business practices, such as phony charities and a fraudulent college scheme. The attorney general’s lack of trust in Trump is evident, especially after winning a significant lawsuit against him for massive fraud.
CBS News reported that the initial bond lacked crucial information, including documents related to power of attorney for Knight Specialty and a financial statement from the company. Knight Specialty subsequently updated its filing, including a joint limited power of attorney and a financial statement showing a surplus of $1 billion.
Trump (Credits: Bloomberg)
Former Assistant New York Attorney General Adam Pollock criticized the initial bond for being procedurally and substantively flawed. He noted that Knight Specialty lacks a license to issue surety bonds in New York and does not fulfill New York insurance law requirements.
The deadline set by the attorney general increases pressure on Trump, as failure to meet it could result in the execution of the judgment, including seizing and liquidating his assets. However, some experts believe Knight Insurance will clarify that affiliated policyholders are backing the bond.
Despite potential consequences, Trump has a nine-month window to appeal, allowing him to post a bond at any time during that period. However, if the court deems Knight Specialty’s justification insufficient, Trump could be liable for the full sum of the judgment.
A hearing is scheduled for April 22 to discuss the bond’s validity and potential issues. Pollock predicts that the presiding judge, Arthur Engoron, will have little patience for the situation, considering the gravity of the case and Trump’s history of financial misconduct.
