Former U.S. President Donald Trump leaves a pre-trial hearing on charges stemming from hush money paid to a porn star, during a recess, with his defense team, in New York City, U.S., March 25, 2024.
| Photo Credit: REUTERS
A New York appeals court on March 25 agreed to hold off collection of former President Donald Trump’s $454 million civil fraud judgment — if he puts up $175 million within 10 days.
If he does, it will stop the clock on collection and prevent the State from seizing the presumptive Republican Presidential nominee’s assets while he appeals.
The development came just before New York Attorney General Letitia James was expected to initiate efforts to collect the judgment.
Messages seeking comment were sent to Ms. James’ office and to Mr. Trump’s lawyers.
Mr. Trump’s lawyers had pleaded for a State appeals court to halt collection, claiming it was “a practical impossibility” to get an underwriter to sign off on a bond for such a large sum.
The ruling was issued by the State’s intermediate appeals court, the Appellate Division of the state’s trial court, where Mr. Trump is fighting to overturn a judge’s Feb. 16 finding that he lied about his wealth as he grew the real estate empire that launched him to stardom and the Presidency.
Also Read | Donald Trump attends court, calls New York fraud trial a ‘scam’
After Ms. James won the judgment, she didn’t seek to enforce it during a legal time-out for Mr. Trump to ask the appeals court for a reprieve from paying up.
That period ended on March 25, though Ms. James could have decided to allow Trump more time.
Ms. James, a Democrat, told ABC News last month that if Mr. Trump doesn’t have the money to pay, she would seek to seize his assets and was “prepared to make sure that the judgment is paid.”
She didn’t detail the process or specify what holdings she meant, and her office has declined more recently to discuss its plans. Meanwhile, it has filed notice of the judgment, a technical step toward potentially moving to collect.
As Mr. Trump arrived on March 25 at a different New York court for a separate hearing in his criminal hush money case, he didn’t respond to a journalist’s question about whether he’d obtained a bond. Earlier on March 25, he railed in social media posts against the civil judgment and the possibility that James would seek to enforce it.
Casting the case as a plot by Democrats, the ex-President asserted that they were trying to take his cash to starve his 2024 campaign.
“I had intended to use much of that hard earned money on running for President. They don’t want me to do that — ELECTION INTERFERENCE!” he wrote on his Truth Social platform. Referring to his properties as “my ‘babies,’” he bristled at the idea of being forced to sell them or seeing them seized.
Seizing assets is a common legal option when someone doesn’t have the cash to pay a civil court penalty. In Mr. Trump’s case, potential targets could include such properties as his Trump Tower penthouse, aircraft, Wall Street office building or golf courses.
The Attorney General also could go after his bank and investment accounts. Mr. Trump maintained on social media on Friday that he has almost $500 million in cash but intends to use much of it on his Presidential run. He has accused Ms. James and New York State Judge Arthur Engoron, who’s also a Democrat, of seeking “to take the cash away so I can’t use it on the campaign.”
One possibility would be for Ms. James’ office to go through a legal process to have local law enforcement seize properties, then seek to sell them off. But that’s a complicated prospect in Mr. Trump’s case, noted Stewart Sterk, a real estate law professor at Cardozo School of Law.
“Finding buyers for assets of this magnitude is something that doesn’t happen overnight,” he said, noting that at any ordinary auction, “the chances that people are going to be able to bid up to the true value of the property is pretty slim.”
Mr. Trump’s debt stems from a months-long civil trial last fall over the state’s allegations that he, his company and top executives vastly puffed up his wealth on financial statements, conning bankers and insurers who did business with him. The statements valued his penthouse for years as though it were nearly three times its actual size, for example.
Mr. Trump and his co-defendants denied any wrongdoing, saying the statements actually lowballed his fortune, came with disclaimers and weren’t taken at face value by the institutions that lent to or insured him. The penthouse discrepancy, he said, was simply a mistake made by subordinates.
Also Read | Donald Trump liable for $355 million, judge in New York civil fraud case rules
Engoron sided with the Attorney General and ordered Mr. Trump to pay $355 million, plus interest that grows daily. Some co-defendants, including his sons and company executive vice presidents, Donald Trump Jr. and Eric Trump, were ordered to pay far smaller amounts.
Under New York law, filing an appeal generally doesn’t hold off enforcement of a judgment. But there’s an automatic pause if the person or entity posts a bond that covers what’s owed.
The ex-President’s lawyers have said it’s impossible for him to do that. They said underwriters wanted 120% of the judgment and wouldn’t accept real estate as collateral. That would mean tying up over $557 million in cash, stocks and other liquid assets, and Trump’s company needs some left over to run the business, his attorneys have said.
Mr. Trump’s attorneys have asked an appeals court to freeze collection without his posting a bond. The Attorney General’s office has objected.
