Trump’s $175 Million Fraud Bond Safe As Lawyers And AG Reach Agreement

Top line

The $175 million bond former President Donald Trump put up in his civil fraud case will not be invalidated, as his attorneys and the New York attorney general’s office reached an agreement Monday after the state raised concerns about the bond and the California-based insurance company Trump used to secure it.

Former President Donald Trump talks to members of the media outside the courtroom in New York … [+] State Supreme Court on the first day of his civil fraud trial on October 2, 2023.

AFP via Getty Images

Key Facts

Trump posted bond for $175 million in the fraud case earlier in April, after an appeals court said he did not have to immediately put up the full $464.2 million he and his co-defendants had been ordered to pay for fraud.

The attorney general’s office, which brought the fraud lawsuit, raised objections to the bond in court, claiming the company Trump used to secure it—Knight Specialty Insurance Company—didn’t prove it could actually cover the full bond if Trump didn’t pay .

Records also showed that Trump’s lawyers gave Knight access to an account with $175 million in cash in it, but did not give them full control of it—which, the state argued, meant Trump could simply withdraw some of the money if he wanted to or replace it with investments that could make the account worth less than $175 million when it came time for Trump to pay.

Judge Arthur Engoron held a hearing on the issue Monday, where the state and Trump’s team reached an agreement that requires Knight to have full control over the account and ensures it stays entirely in cash, according to the attorney general’s office.

The agreement also requires Trump and Knight to report monthly account statements to the court and attorney general’s office.

What To Watch For

Trump is appealing the fraud case, and it’s unclear how long that will take to play out. Although Trump only had to put up $175 million in cash now, he’ll have to pay the full judgment against him if he loses the case on appeal. Trump has been personally ordered to pay more than $454 million of the $464 million total judgment in the case; much smaller fines were also levied against his two sons and former CFO Allen Weisselberg. That $454 million is expected to be substantially larger by the time the appeals process is complete, however, as interest accrues on Trump’s payment at a rate of more than $111,000 per day.

Tangent

Trump spoke out against New York Attorney General Letitia James and her challenge of his bond as he entered the courtroom for his separate criminal trial on Monday, telling reporters that she “shouldn’t be complaining” about the bond given that Trump put up cash. “Why would she be doing [opposing the bond]

when I’ve put up the money,” Trump asked, adding that he has “plenty of money to put up.”

Forbes Valuation

Forbes values Trump’s net worth at $4.7 billion as of Monday afternoon, as the ex-president’s assets have shot up in the wake of his company Trump Media & Technology Group going public. Only approximately $413 million of his total net worth is made up of cash and liquid assets, however, meaning that while Trump could pay the entire $175 million in cash, he could not cover the full amount he was ordered to pay in the fraud case.

Key Background

Trump and his business associates—including sons Eric and Donald Trump Jr.—were found liable for misstating the value of assets on financial documents in February following a monthslong trial. James’ office brought the case against the ex-president and his company in 2022, alleging Trump and his co-defendants inflated the value of assets in order to obtain more favorable business deals and reflect a higher net worth for Trump. Engoron agreed, ruling there was “overwhelming evidence” to suggest Trump and his sons signed off on financial statements despite knowing valuations were false. How Trump would pay his massive nine-figure bond became a matter of widespread speculation in the wake of Engoron’s ruling, particularly after his lawyers said in court filings that they had been unable to secure a bond for the full amount and suggested Trump could have to hold a “fire sale” of his properties. The appeals court spared Trump at the last minute, lowering the amount he had to pay immediately to $175 million on the day that James could have started seizing Trump’s properties if he hadn’t paid. Trump posted the $175 million bond soon afterwards, with billionaire Don Hankey, who chairs Knight, telling Forbes his company had approached Trump about the bond, rather than the other way around.