Donald Trump's Options to Tackle His 'Greatest Financial Crisis'

Former President Donald Trump is facing the biggest financial crisis of his life as a result of the massive lawsuit judgments against him, a legal expert said.

Stephen Gillers, a law professor at New York University, was reacting to the $355 million a New York judge fined Trump on February 16 in his civil fraud trial and to the $83.3 million awarded against him in the E. Jean Carroll defamation case on January 26. Gillers told Newsweek that Trump does not have the liquid cash to pay the sums involved.

Trump will have to pay the awards, or put up assets as collateral, which puts an immediate squeeze on his finances. It will be up to the courts to decide how much he must put up if he appeals, and he might be required to pay the full sum immediately after the appellate court rules on the fraud case. For the Carroll case, Trump could secure a bond and pay a portion up front.

"I think it's fair to say that Trump is facing a financial crisis greater than he ever has faced, and now his father is not around to bail him out, not that his father had the funds, either," Gillers said. Newsweek sought email comment on Monday from Trump's attorney.

Gillers said: "I doubt he has the amounts in cash. He'll either have to sell something or get bonds from a surety, for which he'll have to put up collateral worth more than the amount of the bond. That's because the worth of the collateral may fluctuate and the surety doesn't want that risk."

Gillers added that Trump will have to post a bond higher than the award because of the accrued interest over time.

Massachusetts-based attorney Anne Stevenson agreed that Trump will not have the cash liquidity to pay. She added that he has the complication as well of Judge Arthur Engoron's summary judgment in September, in which he ordered that key Trump companies be placed in receivership. That ruling is stayed pending appeal.

"I don't think Trump has that kind of liquidity and may have to sell property," Stevenson told Newsweek. "However, if Trump loses his appeal on the receivership, he will not be able to sell Trump Tower or other major assets."

New York Attorney General Letitia James sued Trump, adult sons Donald Jr. and Eric, The Trump Organization and firm executives Allen Weisselberg and Jeff McConney in September 2022. Engoron, who oversaw the trial, found that Trump inflated his assets to get more favorable business loans. Late last year into early January, a trial was held to determine how much the former president and his associates would pay in damages.

On Friday, Engoron ruled that Trump will have to pay roughly $355 million in penalties. Trump, Weisselberg and McConney will also be barred from serving as officers or directors of any New York corporation or other legal entity in the state for three years. Donald Jr. and Eric Trump were ordered to pay more than $4 million each and were banned from doing business in the state for two years.

On January 26, the former president was ordered to pay Carroll $83.3 million for defaming her in comments he made in 2019 after she first publicly accused him of raping her in the dressing room of a luxury department store in the 1990s.

A separate jury in May 2023 awarded her $5 million from Trump for sexual abuse and defamation in a civil trial. Trump denied wrongdoing and said he would appeal.

The frontrunner for the 2024 Republican presidential nomination has maintained his innocence and repeatedly said that both cases are politically motivated.