Trump’s civil fraud case: 6 things you need to know as court reduces bond amount to $175M
6 things to know as Trump’s bond in civil fraud case is reduced from $454M to $175M
Donald Trump had a last-minute legal victory on Monday, March 25, when an appeal court reduced his massive $454 million bond to $175 million. The five-judge panel from New York’s Appellate Division, First Department, gave another 10-day extension to post the bond hours before the previous deadline ended. The decision has effectively stopped New York Attorney General Letitia James from seizing the former real estate mogul's physical assets. Here are six things to know in the light of the latest development in Trump's civil fraud verdict.
1. Why did court reduce bond to $175 million?
Last week, Trump's lawyers informed the court that they faced "insurmountable difficulties" in securing the full bond amount to appeal the $454 million verdict. They requested the First Department to waive the bond completely or allow an extreme reduction in the total amount. Jerry Goldfeder, a professor at Fordham Law School, told the New York Post, “It appears that the court accepted Trump’s excuse that he could not post the entire amount and wanted to give him the opportunity to post a bond so that his appeal would not be an academic exercise."
2. What's next after Trump posts bond?
Once Trump posts the bond, the February 16 judgment issued by Justice Arthur Engoron will be paused. Besides the penalty, it includes the verdict banning the ex-president and his two sons, Eric and Donald Trump Jr, from serving in any New York-based company for three and two years, respectively. In addition, Trump and his real estate empire can continue to take loans in New York as long as the ruling is suspended. However, the appeal court kept Engoron's decision to expand the independent monitor's power to oversee the Trump Organization's dealings intact.
3. When will Trump appeal verdict?
Trump should submit his appeal documents to the First Department before the September term of oral arguments in the state's mid-level court. The multiple delays by the ex-president's appeal will cause a further delay in the final decision, which will now be unlikely to be made before the presidential election in November. Trump has appealed to overturn two of Judge Engoron's verdicts. One ruling took away his New York business license, and the other a massive penalty.
4. What's at stake for Trump if he loses the appeal?
If Trump ultimately loses the appeal, he will be required to pay the full penalty, which amounts to $454 million. In addition, a $120,000 interest will be added to the total amount each day. In addition, NY AG James can go after his iconic properties in Manhattan if he fails to come up with the entire fine. This includes the base of his Trump Organization, the Trump Tower.
5. Legal experts label bond amount reduction 'extremely rare'
Neil Pedersen, the owner of Pedersen & Sons, a surety bond agency, said to Business Insider that the court's decision to reduce the bond amount by 62 percent was an "extremely rare" scenario. During his company's extensive experience handling bonds over three decades, he emphasized that courts in New York rarely grant reductions to appeal bonds, especially when the original judgment amounts are substantially lower.
6. Legal experts say court may later reduce total penalty
Eric Snyder, the bankruptcy chair of Wilk Auslander LLP, also opined he had never seen this kind of massive reduction in a bond amount, as per Business Insider. He said that the court might reduce the total penalty against Trump, which currently is $464 million, in light of its decision on the bond. "It might be an indication it'll get reduced on appeal," he stated. The penalty increases by $112,000 per day in terms of interest in the case brought by NY AG James.
