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Donald Trump could be moving towards bankruptcy as he struggles to pay the $454 million he owes from his New York fraud trial, a legal expert told Newsweek.
Judge Anil Singh rejected Trump's $100 million bond offer on Wednesday and ordered that the former president pay the full penalty or cash bond amount by the original deadline. The Republican has to stump up the full $454 million by March 25 to begin the appeal process. Newsweek contacted Trump's legal team for comment via email on Friday. He remains the frontrunner for the Republican nomination in the 2024 presidential election.
If he can't, Trump must pay the full amount of the judgment or face asset seizure by New York Attorney General Letitia James. She has already said that she will seize Trump assets if he doesn't pay. In a filing to Singh on Wednesday, James wrote that Trump has essentially conceded that he "has insufficient liquid assets" to honor the fine.
Engoron's decision comes after James filed a lawsuit in September 2022 accusing the former president, his two adult sons Donald Jr. and Eric, the Trump Organization and two company executives, Allen Weisselberg and Jeff McConney, of fraudulently overvaluing assets to secure more favorable bank loans and tax deals. The other defendants in the case have received financial penalties and are banned from doing business in New York for a period.
Greg Germain, a law professor at Syracuse University in New York, told Newsweek that, if Trump doesn't get a stay on the order to pay the full $454 million, "he's in a very tough spot." He said James can begin enforcement proceedings, "both against the New York assets, as well as assets in other states if she wants to."
"Aggressive enforcement could wreak havoc on his businesses. The usual course is bankruptcy to protect his assets and businesses," Germain said.
Singh did provide Trump some relief by accepting the request to pause the three-year ban Engoron issued that prohibited the former president from pursuing loans from banks in New York, potentially providing Trump with a way to secure the money for the bond.
On February 16, New York Judge Arthur Engoron ordered that Trump pay a $355 million fine, increasing to $454 million with interest. He ruled that the former president filed fraudulent financial statements that inflated the value of his properties and assets for years.
Trump's lawyers wrote in a submission to Singh that "the exorbitant and punitive amount of the Judgment coupled with an unlawful and unconstitutional blanket prohibition on lending transactions would make it impossible to secure and post a complete bond."
"In the absence of a stay on the terms herein outlined, properties would likely need to be sold to raise capital under exigent circumstances, and there would be no way to recover any property sold following a successful appeal and no means to recover the resulting financial losses from the Attorney General," Trump's legal team added.
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About the writer
Sean O'Driscoll is a Newsweek Senior Crime and Courts Reporter based in Ireland. His focus is reporting on U.S. law. ... Read more