A New York appeals court agreed Monday to delay collection of a more than $454 million civil fraud judgment if former President Donald Trump pays $175 million within 10 days.
If Trump did so, it would stop the clock on collection and prevent the state from seizing the Republican presidential nominee’s assets while he appeals. The appeals court also halted other aspects of the trial judge’s ruling that barred Trump and his sons Eric Trump and Donald Trump Jr., executive vice presidents of the family company, from serving as corporate leaders for several years.
All in all, the order is a major victory for the Republican former president as he defends the real estate empire that launched him into public life. The development comes ahead of an expected launch of the collection of verdicts by New York Attorney General Letitia James, a Democrat.
Trump, who was in New York for a separate hearing in the criminal hush-money case, welcomed the ruling and said he would post bonds, securities or cash to pay the $175 million in the civil case. Speaking in a courthouse hallway, Trump revisited civil trial Judge Arthur Engoron, whom he has often complained about, and the penalties he imposed.
Trump said: “What he did was a great harm and should never be allowed to happen again.” He believed that the fraud case was hindering business activity in New York.
James’ office, meanwhile, noted that the sentence remains in effect even if collection is suspended.
“Donald Trump continues to face accountability for his egregious fraud,” the office said in a statement.
Trump’s lawyers had pleaded with a state appeals court to halt collections, saying it was “practically impossible” to get underwriters to sign off on such a huge bond, which was growing every day because of interest. Trump’s lawyers earlier proposed $100 million bail, but an appeals judge rejected it late last month.
Monday’s ruling came from a five-judge panel on the Appellate Division of the state’s intermediate appeals court, where Trump is working to overturn Ngoren’s February 16 ruling. Trump’s attorneys, Alina Habba and Christopher Kise, described Monday’s ruling as a critical first step.
After a month-long civil trial that found that Trump, his companies and executives lied about his wealth on financial statements and deceived bankers and insurance companies with whom he did business, N’Golon Station On the side of the Attorney General. For example, over the years, these statements appeared to value Trump’s penthouse at nearly three times its actual square footage.
Trump and his co-defendants deny any wrongdoing, saying the statements actually understated his property, were accompanied by disclaimers and were not taken literally by the institutions that loaned him money or insured him. He said the difference in the penthouse was just a mistake made by his subordinates.
Ngolon ordered Trump to pay $355 million, plus interest. Some co-defendants, including Donald Trump Jr. and Eric Trump, were ordered to pay much smaller amounts. Monday’s ruling also suggests the projects will be put on hold if the $175 million bail is paid.
After James won the judgment, she did not seek enforcement of it during the statutory pause in Trump’s request to an appeals court to halt the payments.
That period ended on Monday, although James could have decided to give Trump more time.
James told ABC News last month that she would seek to seize Trump’s assets if he didn’t have the money to pay. She did not elaborate on the process or specify what holdings she was referring to, and her office recently declined to discuss its plans. Meanwhile, the office has filed a notice of sentencing, a technical step toward a possible move to collection.
Trump insisted on social media on Friday that he had nearly $500 million in cash, but said at a news conference on Monday that he hoped to use some of the cash in his presidential campaign. He claimed that James and Ngolon, a fellow Democrat, “didn’t want me to spend cash on my campaign.”
If the penalties are ultimately upheld, the attorney general may pursue Trump’s bank and investment accounts. There is also the possibility of legal proceedings to seize properties such as his Trump Tower penthouse, airplanes, Wall Street office buildings or golf courses and then seek to sell them.
But in Trump’s case, things could get complicated.
“Finding a buyer for an asset of this size is not something that happens overnight,” noted Stuart Steck, professor of real estate law at Cardozo School of Law.
Under New York law, filing an appeal does not generally delay execution of a judgment. However, if the person or entity posts a security deposit on the debt owed, there will be an automatic moratorium.
Many defendants are able to secure such bonds, but “sentences of this magnitude are rare,” said Joshua Naftalis, a former federal prosecutor now in private practice.
“What’s unusual about this guy is that he’s carrying a huge amount of money and he has to pay for it himself,” Naftalis said.
Lawyers for the former president said the underwriters want 120 percent of the judgment and will not accept real estate as collateral. Trump’s lawyers said that would mean tying up more than $557 million in cash, stock and other liquid assets, with Trump’s company needing some remaining funds to run its operations.
They asked the appeals court to freeze collections if he failed to post bond. The attorney general’s office objected, saying he had not considered all options for paying the amount.
Naftalis said the appeals court “chose the middle ground” and still required Trump to provide the funds but lowered the amount.
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