Trump Can’t Cover His $464 Million Appeal Bond, And It Appears No One Else Wants To

Former President Donald Trump is having trouble securing a bond to cover the massive $464 million judgment against him in the New York attorney general’s civil fraud case. According to his lawyers, Trump has approached 30 underwriters, but none have agreed to back the bond, which is due by the end of this month.

In court filings, Trump’s attorneys stated that “the amount of the judgment, with interest, exceeds $464 million, and very few bonding companies will consider a bond of anything approaching that magnitude.” An insurance broker, Gary Giulietti, who testified for Trump during the civil fraud trial, signed an affidavit stating that securing a bond in the full amount “is a practical impossibility.”

The potential underwriters are seeking cash to back the bond, not properties, which has created a significant obstacle for Trump. His lawyers have asked the appeals court to delay posting the bond until his appeal of the case is over, arguing that the value of Trump’s properties far exceeds the judgment.

Trump himself has claimed that the size of the bond is “unConstitutional, un-American, unprecedented, and practically impossible for ANY Company, including one as successful as mine.” He added on Truth Social that “The Bonding Companies have never heard of such a bond, of this size, before, nor do they have the ability to post such a bond, even if they wanted to.”

Last month, Trump was ordered to pay $355 million in disgorgement, or “ill-gotten gains,” by New York Judge Arthur Engoron in a civil fraud case brought by New York Attorney General Letitia James. Engoron found that Trump and his co-defendants fraudulently inflated the value of Trump’s assets to obtain more favorable loan and insurance rates.

While Trump is appealing the ruling, he must post a bond to stop the state from enforcing the judgment during the appeal process, which could take years. However, as Giulietti stated, “After substantial good-faith effort over the last several weeks, obtaining an appeal bond for the Judgment Amount of over $464 million is just not possible under these circumstances.”

The bond company — if they wanted to — would be on the hook if Trump loses his appeal.

Does the Trump brand add a premium?

It seems that Trump’s mounting legal woes are also taking their toll on his most prized possession — his brand.

Properties bearing the Trump brand name in Manhattan have experienced a significant decline in value since Donald Trump assumed the presidency in 2016, according to a report by the New York Times. The analysis found that the average price per square foot for condos in Trump Tower on Fifth Avenue, where Trump launched his 2016 campaign, has dropped by 49% since 2013.

While some formerly Trump-branded buildings that have removed the Trump name have seen an increase in value, the report indicates that the Trump brand itself is responsible for the value deterioration. Stijn Van Nieuwerburgh, an economist at Columbia University, stated, “Removing the Trump name from the building removes the loss associated with the name.”

The Times reported that the value of seven other Trump-branded buildings in Manhattan declined by 23% between 2013 and 2023, with a separate analysis estimating a 17% drop. Eric Trump, the former president’s son and Trump Organization executive, disputed the findings, claiming their buildings command the highest prices per square foot worldwide.

Despite a recent $17 million condo sale at Trump International Hotel & Tower New York, the analysis noted that the unit sold for significantly less per square foot compared to a penthouse in the West Village.

This value decline comes amid mounting legal challenges and fines faced by the former president, including the cases filed by E. Jean Carroll which resulted in an $83 million defamation judgment and a $5.5 million award for sexual abuse.

Trump managed to secure a deal for the E. Jean Caroll appeal bond at the last minute. As for the NY fraud case, if he’s still unable to produce the half-a-billion dollar bond by Monday, March 25, the former president would need to be very creative in finding ways to spin the humiliation. New York’s attorney general would then be entitled to collect the full amount owed to the state.

“We are prepared to make sure that the judgment is paid to New Yorkers, and yes, I look at 40 Wall Street each and every day,” James said in February.

Information for this story was found via the New York Times, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply