The New York attorney general’s office contends that the $175 million bond posted by former President Donald Trump in the civil fraud case against him and his company is insufficient and should be invalidated. They argue that Knight Specialty Insurance Company (KSIC), the company underwriting the bond, hasn’t demonstrated the financial capacity to cover the full amount. This assertion sets the stage for a crucial hearing on the bond’s fate scheduled for Monday.
Trump was directed to post the $175 million bond after being found liable, along with his associates, for fraudulently misstating asset values to secure advantageous business deals and inflate his net worth. Despite this significant sum, it only represents a fraction of the total amount owed, which exceeds $464.2 million.
The involvement of KSIC in underwriting the bond has been scrutinized, with the attorney general’s office challenging the company’s financial capability to fulfill its obligations. Despite efforts by KSIC to defend its financial position, the attorney general’s office remains unconvinced, citing concerns about the company’s reported worth and alleging the use of a “shadow” company to appear financially stable.
Trump (Credits: ABC News)
Additionally, the state questions the adequacy of Trump’s collateral, as it alleges that the $175 million in cash used for collateral may not be securely held, potentially allowing Trump to withdraw funds and jeopardize coverage for the bond.
Trump’s legal team and KSIC have yet to respond to these assertions, maintaining in their filings that the company is reputable and well-capitalized, capable of meeting its obligations under the bond.
The impending hearing before Judge Arthur Engoron will be pivotal, as the state seeks to have the bond declared invalid and replaced within a week. Meanwhile, Trump’s net worth, though substantial, may not fully cover the financial obligations he faces in the fraud case, particularly if the bond is invalidated, leaving him potentially liable for the entire amount.
