The judge in Donald Trump's fraud case has returned a damage assessment of $355 million. That's a lot!
This will be appealed, of course, so Trump won't have to pay anything soon. Still.
59 thoughts on “Trump ordered to pay $355 million in fraud case”
Comments are closed.
I believe that in order to appeal Trump has to post the full amount to some sort of escrow account. He can’t just not pay by infinite delays.
NY is a "pay now" state to avoid what you mentioned. He paid out for a bond of $5 million for the first defamation case and now must also get a bond for the $83 million on the second. And those are personal - not the company which was the defendant in this case. The two cannot be intermingled. So, he is hurt personally and his company is hurt. And not just a little. The ripple effect will spread through the entire financial world.
The NYT says the same thing: "Mr. Trump will appeal the financial penalty — which could climb to $400 million or more once interest is added — but will have to either come up with the money or secure a bond within 30 days."
https://www.nytimes.com/2024/02/16/nyregion/trump-civil-fraud-trial-ruling.html
I wonder what financial institution in their right mind would lend money to Trump for this bond? The bad press alone seems like it will be a huge factor.
Maybe secure it with a lien on some of his properties. (One trusts they'd do their own value assessments 😄)
Now we know why Trump wants to install Lara Trump as head of the RNC
It's not a loan. The bond is payable to the state if the company loses the appeal. The bond for the $83 defamation award is his and if he loses on appeal that goes to the plaintiff. I know of only 6 or 7 financial institutions that are capable of handling the bond on today's award and I've been told there are only about 10. I cannot imagine how they do the due diligence on the valuation of the collateral within 30 days if one of them decides to take the risk.
It is in essence a loan. It’s not a bet. If the bond is paid to the state, the bonding company then is entitled to collect from Trump.
It won't be a financial institution anywhere in New York...
I wonder what financial institution in their right mind would lend money to Trump for this bond?
Vladimir Putin is often said to be the world's richest human.
Also, according to the judgment, it can’t be from a bank that does business in New York.
😀
This is all correct. To stay collection, an appellant must post a thing called a superseas bond, generally in an amount in excess of the total judgment (usually 110-125%). This can be deposited into the court registry in cash, or else you can post a bond--which is issued by an insurance company or similar financial institution--and which is the equivalent of cash, because if the appellant (trump) loses the appeal, the plaintiff (the State) can get the cash from the bonding company.
To get a bond, you have to pay a big fee (usually 10% of the face value of the bond), plus pledge security to make the bonding company feel warm and fuzzy that they will be able to get their money if they have to pay the bond. For trump, the fraudster, he will have to pledge deeds of trust or other security in the hundreds of millions, probably double the bond amount. This will be problematic, because his real estate is already leveraged, and the bonding company will probably not want junior liens.
In short, this is going to put trump in a world of hurt.
BTW, if he does not obtain and post a supersedeas bond, Leticia James can immediately start collecting from trump by garnishing his bank accounts, putting liens on his real estate (and starting foreclosure proceedings), seizing trump's personal assets, etc.
Again, trump is going to be in a world of hurt.
you have lots of really good info in there; thx!
Exactly. There are about 10 insurers with the ability to do this. In the country. The premium would likely be more than 10%. Their risk assessment teams would game this out so I would bet it would be more like 15 -20%. The company could also reach out to a bank for a guarantee, but that might be prohibitively expensive. In either case, each would need to do their own due diligence on the real value of the collateral. How that could be done within 30 days will be a good trick. Not impossible, but if I were the GC for the insurer I would recommend to take it all wherever the collateral is located. Even then, the risk managers would likely put red flags everywhere. You're right. This is a world of hurt. And it doesn't include his personal liability of $83 million to appeal the defamation damages (he's already put up the $5 million for the first).
Maybe Elon will put up the money. That’s about 1% of what he stupidly spent on Twitter.
Or perhaps Putin will "loan" Trump the money. Putin would see it as a small investment in his imperialist conquest of the world.
He could send the money to the very brave Mr. Trump in suitcases with Navalny's picture on them.
I think Putin would use what seems to be a tried and true method of funneling the money through Deutsche Bank. There’s long been considerable speculation about Trump’s relationship with DB and whether the bank was arguably “careless” in lending Trump money because it was actually the money of a Russian oligarch or gangster that the bank was laundering.
One presumes DB made money coming and going, but yeah their presence in Russia has raised questions.
Germany raided DB years ago, but that investigation seems to have gone nowhere. Why am I not surprised...
Relatedly, I'd love to know what Trump said to Kennedy on the way into his retirement ceremony - probably something about his DB-banker son, and along the lines of "I can protect him/you." Which presumably is also what he said to Lindsey Graham out on that golf course about whatever.
It’s not just that Trump’s properties are leveraged—there’s almost certainly a ton of covenants in the loan agreements that would define this judgment as an “event of default,” thereby triggering penalties such as additional interest due or acceleration of due dates on the loans. And he might not even be able to pledge any of the properties subject to the judgment, given the prohibition on doing business in New York. I think it’s better than even money the Trump Organization is forced to declare bankruptcy.
Bankruptcy has been mentioned as the "get out of jail card.. In March 2023, SCOTUS unanimously found that a fraud finding - knowingly or not - does not allow the exception and can't be discharged. Bartenwerfer v. Buckley, No. 21-908. If I were a creditor, that's my primary cite.
And if he doesn’t bond, he will likely default under every loan he has, because a large unsatisfied judgment is invariably a default. That means all of his loans will come due immediately, all at once. It will also mean that no bank would ever loan him another nickel, even if they weren’t prohibited from doing so.
We may see him declaring bankruptcy within the month (which would put a temporary ban on all collection actions).
Get him where he hurts! In his pocket. Will the mega fools pay this???
Of course they will. I'd be surprised if he doesnt' set up a fund, ask for donations and have his MAGA 'fans' pay the full amount.
Fine. Less money for elections, for him and other Republicans. (This is also why I'm totally cool with him turning the RNC into his personal piggy-bank.)
ETTD. They still don't seem to have got the message ...
They knew he was a scorpion when they let him crawl onto their backs.
Of course he will. $355,000,000 is, however, rather a lot of money.
For comparison, that's a bit more his direct spending on the 2016 election:
https://www.opensecrets.org/pres16
And there are the other cases, which continue to need lawyers, for which he's burning something like $2M/week on...
I think we're about to find out what dude is actually worth.
Half a billion dollars in 30 days?
I'd really rather he suffered massive heart attack and just died... or something.
I can think of a lot of or somethings. None of them are good. As they say, there are worse things than death.
Can we just suggest fleeing to a non- extradition country?
trump also was barred from serving as an officer or director of any new york corporation for three years
Engoron also barred Trump and his companies named in the suit from applying for loans from any financial institution chartered in New York for three years, which could sharply curtail his ability to obtain credit from major U.S. banks.
He is purported to be a multi billionaire, so $355MM shouldn't be a problem at all.
I'm sure its not going to impact his popularity with the MAGA crowd, after all, they don't have a problem with him being a pathological liar, rapist, con artist, indicted felon, racist piece of shit, what is the problem adding fraudster to his list of accomplishments?
Well, also adding "loser."
Fk that guy
Took a quick look at the 46,000 word ruling. PDF here
https://s3.documentcloud.org/documents/24432591/ruling-in-donald-trumps-civil-fraud-trial.pdf
Of interest is this from the INTRODUCTION
Executive Law Section 63(12)
In the subsequent six decades, the State has toughened the statute. In Laws of 1965, Chapter 666, the definitions of the words “fraud” and “fraudulent” were expanded to include “any device, scheme or artifice to defraud and any deception, misrepresentation, concealment, false pretence [sic], false promise or unconscionable contractual provisions.”
Chapter 666 is where the law was expanded in order to go after Trump. Clearly Letitia James is a minion of Satan and is determined to hurt honest, pious, most Christian in all things, Donald Trump.
Pardon me while I go to the QAnon discussion groups to share this explosive *revelation*.
I was just reading about 63(12). Apparently it’s a law in New York that answers my question with regard to this case. I had learned as an investigator with the California Department of Real Estate that in order to prove fraud you had to have a victim, some person who would say that they relied on the fraudulent information and would not have lent the money had they known the truth. This thwarted many investigations of fraudulent loans leading to the 2008 real estate crash. The “victim” banks refused to cooperate. I personally had one bank official laugh and say “that’s why they call them liar loans”.
So since Trump’s lenders testified that they did not rely on the fraudulent information I didn’t understand why this case was proceeding. But after reading this article I now understand:
Yet the victims — the bankers who lent to Mr. Trump — testified that they were thrilled to have him as a client. And while a parade of witnesses echoed Ms. James’s claim that the former president’s annual financial statements were works of fiction, none offered evidence showing that Mr. Trump explicitly intended to fool the banks.
That might seem unusual, but under 63(12), such evidence was not necessary to find fraud.
The law did not require the attorney general to show that Mr. Trump had intended to defraud anyone or that his actions resulted in financial loss.
“This law packs a wallop,” said Steven M. Cohen, a former federal prosecutor and top official in the attorney general’s office, noting that it did not require the attorney general to show that anyone had been harmed.”
https://www.nytimes.com/2024/02/16/nyregion/trump-fraud-trial-ny-law.html
Thank you for that great review of the law and subsequent modification.
That sounds like a great law to go after grifters and liars.
There may be some property tax implications too, at least for some of his properties.
There’s a reason that banks insist on having their loan agreements governed by New York law rather than California law.
The Devil Section, indeed.
If he croaks before he's finished with his endless appeals, he gets off scot free, and his worthless heirs inherit the whole magilla. See Enron, Ken Lay.
This is New York, his estate and company is still liable.
... But is that true in New York state? (Now that I've read the preceding?) Since they will have his bond?
Meanwhile, MagaJesus gets to drive a few more nails into his palms. The fans will love it.
The "campaign" messages are on the way already:
"The corrupt Demoncrat judge in New York is trying to bankrupt me, so I can't fight for you. You MUST send me everything you've got so that I can continue to fight for you against the arrogant Demoncrat Communists!"
Some interesting discussions of the details of appellate bonding, but none of that is relevant here. We're talking about Donald Trump. He won't put up a dime in cash. Billionaires are going to line up to fund the bond, which can be fully collateralized by real estate and has the added benefit of buying Trump's undying gratitude and/or pardons if and when he gets elected as the next president of the United States. MBS could find that money under the couch cushions. Jared Kushner is sitting on $1.2B of Qatari and UAE money. Think the Qataris wouldn't bet $350M if it might buy them four years of protection from their various enemies?
Or Elon Musk, for that matter. $350M might buy him NASA funding for that Mars mission he's been eyeing for a while.
So don't shed any tears for Donny. He's not going to be out a dime. He never is.
My guess is that a consortium of billionaires and banks looking for influence in a prospective Trump restoration will come together and bail him out. I think he will fund-raise a lot of money off of the verdict but I doubt if the MAGA faithful can raise the whole roughly $400 million that Trump will need but he should easily clear $100 million or more so if he defaults on the loans/guarantees from the billionaires and the banks, he could actually turn a profit on all of this.
(and I’m pretty sure he will default on whatever arrangements he makes to permit him to appeal. If he wins the presidency, he take the $400 million as his due and the backers will be more or less happy to let him because they’re sure he’ll use the federal government to take care of them. If Biden wins, Trump will default because he won’t be able to pay and he won’t feel any sense of obligation to the bunch of crooks who bailed him out).
Any deal would be fully collateralized by corporate real estate, a lot of which might actually be more valuable without the Trump name. So if Trump loses and defaults, his creditors take the real estate. If he wins and defaults, they walk away from the money (or more likely restructure and push out repayment for years) and bank the political favors, which is what they're mainly interested in anyway.
This is a no lose proposition for anyone holding the cash. I'm guessing there will be multiple bids and Trump's going to end up with a below market interest rate.
I’m not sure that he’s got enough equity in his real estate to make a financing deal work. So it’s either a sweetheart deal with the billionaires and bankers or it’s bankruptcy again.
Independent estimates are putting Trump's current net worth at about $1.2B, of which $400M is cash and $800M is commercial real estate. Any competent bond lawyer could lock both of those up tight. That's more than enough collateral to protect this debt.
Virtually all commercial real estate already has at least one, if not two or three, mortgages on it.
Trump’s most valuable asset is a share of an office building in downtown San Francisco—not exactly an asset class that is currently fetching anything above fire sale prices.
You may be right, but I have never known bankers to be colossally stupid in commercial lending practices (only materially stupid). Orange Jesus is a known deadbeat, and if I structured a loan, it would have a pledge of all his, and his idiot son's, equity in all their entities, a second lien on all the hard assets, and would tie him up with a covenant package that could choke a hippo. Since he is a con man and a fraudster, you would need a massive amount of due diligence, assuming any info he provided was a bold face lie. A $10-$20 million non-refundable fee to begin underwriting would be a good idea.
But neither the billionaires nor the bankers would actually be making a loan to Trump. What I think they’d be doing is making an investment in a Trump restoration. And there would be a minimal expectation that any of the money would be recoverable in any event. I think that’s exactly how everyone including Trump would see it—basically a humongous advance bribe to repaid by government favors if Trump wins or written off if he loses.
I can't say what billionaires, like Elmo, might do, but I have never seen bankers underwrite syndicated loans that they knew were under collateralized and highly likely to default (except perhaps the Twitter buyout financing, but they underestimate just how much of an asshole Elmo is). The Money Center bankers pay plenty to lobbyist, and have enough politicians in their pocket on the Hill to protect their interest for the next 4 years regardless who is President. Most would like having a normal Republican as President, but Orange Jesus is pure chaos, which is usually bad for business.
I think this dead horse is now quite well beaten.
It's not stupid for bankers to take commercial property and cash as collateral and any non-stupid banker can lock those assets up well enough that Trump can't do anything about it.
It's also not stupid for any number of billionaires to guarantee the bond without caring much whether they have to pay off. There's at least a 40% chance that you're backing an extremely corrupt man who's going to be the next president of the United States. Any billionaire who can't make bank on that doesn't deserve to be a billionaire.
If Biden wins, Trump will default because he won’t be able to pay
push comes to shove he can always rent clarence thomas' rv if he needs a place to stay
And if Trump wins, he'll try to make the whole thing go away via executive order. And the Supreme Court will find a way to let him do so, 5-4.