NEW YORK — Donald Trump is barreling toward a critical deadline in his costliest legal battle yet. If the former president does not provide a financial guarantee by Monday, New York’s attorney general could begin collecting the more than $454 million Trump owes the state in a civil fraud case.
Trump’s lawyers are trying to prevent this. They have asked a court to suspend collection efforts while he appeals the staggering verdict.
The presumptive Republican presidential nominee tried to get bail for the full amount, which would have had a dual purpose: to stop the collection clock on his appeal and to ensure that the state would get its money if he lost.
But more than 30 insurers said no, Trump’s lawyers told the court. They said it is “a practical impossibility” that he could get bail for such a large amount.
That has raised the possibility that New York Attorney General Letitia James could try to enforce the sentence as early as Monday.
Here’s a look at what that could look like, and what it would mean for Trump’s business empire.
Yes. If Trump can’t pay, the state could “seize and sell his assets, seize his real estate and seize anyone who owes him money,” said Gregory Germain, a law professor at Syracuse University.
Seizing assets is a common legal tactic when a suspect does not have enough cash to pay a civil fine. In one famous example, OJ Simpson’s Heisman Trophy was seized in 1999 and sold at auction to cover part of a $33.5 million wrongful death judgment against him.
Trump could avoid losing assets to seizure if he has enough cash — or can free up enough cash — to pay his fine and rising interest.
“If he does not have the money to pay off the judgment, we will pursue mechanisms in court to enforce the judgment and ask the judge to seize his assets,” said James, a Democrat. in a recent interview with ABC News.
Although that won’t happen immediately. Any attempt to take control of Trump’s bank accounts, stock portfolios or properties such as golf courses and skyscrapers would be done through the courts, including through liens and foreclosures.
State officials can’t just show up with chains and padlock at Trump Tower, but they can issue subpoenas requiring Trump to provide information about his finances and assets. They can then use that information to take his property and possibly sell it at auction.
The state sued Trump through James’ office in 2022, alleging that he had committed fraud for years by inflating his wealth based on financial statements provided to banks and insurance companies in connection with various business deals.
Judge Arthur Engoron ruled in favor of the state on many of the key points even before the trial began last year. In February, after a two-and-a-half-month trial, Engoron ordered Trump to pay $355 million plus interest, saying, “The fraudsters found here jump off the page and shock the conscience.”
Trump denies any attempt to deceive banks or anyone else about his wealth. He has said the judge’s decision and the lawsuit itself were politically motivated attempts to prevent him from winning back the White House in the 2024 presidential election.
He has also argued that it is unfair to make him sell assets or spend huge sums on purchasing bonds while the case is still being appealed.
“I DID NOTHING WRONG,” Trump said on his social media platform on Tuesday. “The corrupt political hacks in New York, judge and AG, are asking me to fork out huge amounts of money before I can appeal the ridiculous decision. Never done before. No jury, no victim, full disclaimer clause, happy banks. ELECTION INFERENCES! WITCH HUNT!”
Trump says he is worth several billion dollars, but much of his wealth is tied up in his skyscrapers, golf courses and other properties.
He reported having approximately $294 million in cash or cash equivalents on his most recent publicly available financial statement, but that document is outdated and covers the fiscal year ending June 30, 2021. It is also among the documents Engoron deemed fraudulent for exaggerating Trump’s wealth. and the value of his assets.
Since then, Trump has made nearly $187 million from the sale of the lease for his hotel in Washington, D.C. and the rights to manage a golf course in New York City. His current cash position is unclear. During his civil fraud trial, he said he had more than $400 million in cash, but that figure has not been verified.
Trump also has other legal bills. In January, a jury ordered him to pay $83.3 million for defaming writer E. Jean Carroll after accusing him of sexual assault. Earlier this month, Trump secured $91.6 million in bail to guarantee that verdict while he appeals.
Trump’s lawyers said freeing up cash by selling some of Trump’s properties in a “fire sale” would be impractical because such discounts would lead to huge, irreparable losses.
Trump could receive a financial windfall from a looming deal to showcase his social media company Trump Media & Technology Group, listed on the stock exchange under the ticker symbol DJT.
A shareholders’ meeting is scheduled for Friday. If the deal is approved, Trump would own at least 58% of the shares in the company, which runs his Truth Social platform. Depending on the stock price, that could be worth several billion dollars, although he may not be able to immediately convert those shares into cash.
Meanwhile, the amount Trump owes increases by nearly $112,000 every day due to interest. As of Tuesday, he owed the state nearly $457 million. In total, he and his co-defendants – including his company, sons Eric and Donald Trump Jr. and other executives – owed $467.4 million.
To obtain bail, Trump’s lawyers said they would have to post collateral to cover 120% of the judgment, or about $557.5 million.
Trump could stop the judgment from being collected by declaring bankruptcy.
Under federal bankruptcy law, enforcement of the judgment against Trump would be stayed if he were to declare personal bankruptcy. However, he would still be liable if only his company, the Trump Organization or other entities went bankrupt.
Trump has repeatedly bragged about the fact that he personally has never declared bankruptcy, although several of his previous companies have.
“If he is unable to post bond or comply with the Appellate Division requirements, then I expect him to file for bankruptcy to take advantage of the automatic stay of collections,” Germain said.
“But that’s still a few chess moves away, so we’ll just have to see what happens.”
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