Former US President, Donald Trump can’t find an insurance company to underwrite his bond to cover the massive judgment against him in the New York attorney general’s civil fraud case, his lawyers told a New York appeals court.
Last month, Trump was ordered to pay $355 million in disgorgement, or “ill-gotten gains,” by New York Judge Arthur Engoron in a civil fraud case brought by New York Attorney General Letitia James.
Engoron wrote in his 93-page decision that Trump and his co-defendants including his adult sons were liable for fraud, conspiracy and issuing false financial statements and false business records, finding that the defendants fraudulently inflated the value of Trump’s assets to obtain more favourable loan and insurance rates.
Trump’s attorneys said he has approached 30 underwriters to back the bond, which is due by the end of this month.
“The amount of the judgment, with interest, exceeds $464 million, and very few bonding companies will consider a bond of anything approaching that magnitude,” Trump’s lawyers wrote. (Trump himself was ordered to pay $454 million; the $464 million includes the disgorgement for his adult sons Don Jr. and Eric.)
An insurance broker, Gary Giulietti, who testified for Trump during the civil fraud trial, signed an affidavit stating that securing a bond in the full amount “is a practical impossibility.”
Potential underwriters are seeking cash to back the bond, not properties, according to Trump’s lawyers.
Lawyers for Trump have asked the appeals court to delay posting the bond until his appeal of the case is over, arguing that the value of Trump’s properties far exceeds the judgment. If the appeals court rules against him, Trump asked the court to delay his posting the bond until his appeal to New York’s highest court is heard.
The amount Trump owed the New York State government surpasses $450 million with interest included.
Trump is appealing the ruling, but in order to stop the state from enforcing the judgment, Trump has to post a bond to be held in an account pending the appellate process, which could take years to litigate.
Trump posted a $91.6 million bond earlier this month as part of his appeal in the E. Jean Carroll defamation case but Giulietti said some of the biggest underwriters have internal policies that limit them from securing a bond over $100 million. None of them, he said, including some of the largest insurance companies in the world, will accept real estate they are only comfortable taking cash or stock.
A shocked Giulietti said if you add
fees and interest, Trump would need to come up with more than $550 million.
“Over the course of my career, during which I have been directly or indirectly involved in the issuance of thousands of bonds, I have never heard of nor seen an appeal bond of this size for a private company or individual,” Giulietti said.“After substantial good-faith effort over the last several weeks, obtaining an appeal bond for the Judgment Amount of over $464 million is just not possible under these circumstances.”
Alan Garten, the top legal officer of the Trump Organization, said in a sworn statement that Chubb, which underwrote Trump’s $91.6 million bond to cover the E. Jean Carroll judgment, could not accept real estate to secure the civil fraud bond.
Garten called the lack of underwriters to accept real estate a “major obstacle” to securing a bond.
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