In the next week, Donald Trump is expected to get hit with a nine-figure judgment against him in the New York civil fraud trial – fine, we all understood that but what wasn’t understood – at least by me – is that in order to appeal, Trump will need to come up with a bond, one that includes “credit card-type” interest rates.
Elon Musk or Exxon could breeze right through, but it will hurt Trump tremendously. Trump’s troubles, or at least those addressed in this piece, focus on his personal wealth. Because he gets his legal defense and campaign donations from outside sources for outside purposes, that money is irrelevant when it comes to Trump’s personal financial trouble.
The Daily Beast does a fine job of putting the issue, numbers, and imperative in perspective:
During a deposition with the New York Attorney General in April 2023, Trump boasted that he had $400 million in cash, bragging about how it’s “a lot for a developer.” But even if that were true, it likely won’t be enough to simultaneously cover last month’s $83 million verdict at his rape defamation trial—which he needs to immediately set aside to appeal that case—and the $370 million demanded by the AG for his incessant lying to banks.
As everyone knows, developers have one big disadvantage over other wealthy individuals in that cash flow, and just cash in bank accounts is often a difficult issue. Their wealth is literally tied up in the equity of property.
It makes it hard for a man who may be worth $2-4 billion to find even $500 million in cash to continue with these appeals.
Other unique laws make the issue even worse for Trump (New York state adds a 10%-20% fee to the actual judgment figure, for instance), but the most urgent issue for Trump is the timeline – this money must be put up by mid-March.
Trump has another problem. Though he would normally be able to at least sell assets to get cash, the civil court may order that the Trump Organization go into receivership as it winds down, and Trump may not control what he can sell and when. Moreover, the money from any sales will likely go to satisfy the older debts or more serious fraud first.
As the Daily Beast report makes clear, Trump really can’t look to banks for loans (Even if he had the collateral) because Trump’s valuations of property are at the center of the finding that he committed fraud. Banks are regulated to the point that a credit rating dinged (hard) by a fraud judgment will almost surely put loans out of reach.
The report cites N. Alex Hanley, an expert in how companies appeal enormous judgments, as stating that there are very few cases like Trump’s where the financial ability to pay is really questionable.
Hanley goes on to say, “The subject of the case is whether the values of his properties are what he says they are. He may have some trouble with that.”
You will note that we’re only talking about the ability to pay the New York appellate rules, where one must put up the judgment amount as a type of bond. We haven’t really addressed the issue from a bond company’s perspective.
Ironically, Trump’s massive lead in the GOP primary and small lead over Joe Biden (In most recent polling) may make it that much harder for him to find an appellate bond agency that might help him (Even though Trump would have to put up collateral for the bond agency, too).
Neil Pedersen, who runs an eponymous appellate bond agency in Manhattan, brings up a unique problem. It all begins with Trump having used the presidency to avoid lawsuits while acting as president, even using the Justice Department to defend him. Pederson notes:
“Sureties require an indemnification agreement, a contract for the bond. Now a concern would be: How do you perfect an indemnity of the person that could be the next sitting president? How do you take that person to court?”
It takes a pro like Pederson to identify the issue, but it sure doesn’t take a pro to understand why it will be a problem. Appellate bond agencies would know that Trump has a reputation for stiffing contractees, so why would a bond agency extend Trump a bond on which they have no real fallback if Trump wins the presidency?
It would be tied up in litigation forever.
Banks, bond companies, and every other business whose profits are derived primarily off interest rates on loans are all highly risk-averse, and — as noted by Pederson — who would ever want to take this particular risk when there are (likely) much safer alternatives?
Additionally, not only do the possible bond agencies have to deal with the financial risk, but they must also deal with the risk of associating with Trump and perhaps destroying their reputations as companies. The threats are limited only to the imagination of one deranged and angry Trump supporter, such that there is more than financial risk on the line.
Hanley states that he’s never seen a case like this.
Well, it would be difficult to replicate nearly $500 million in judgments against an ex-president, who will likely have been found liable for fraud but is also expected (by some) to be president again.
This is as unique as spotting a duck with a shark fin.
Oh, wait. There is one other little matter making things difficult for Trump. The interest rates on the bond that must be put up for appeal date back to the initiation of the investigation. In the New York civil fraud case, that would mean going back to 2018 with nine-percent interest rates or roughly $33 million per year — over six years.
I am not a math guy, but that’s a lot of money piled on top of a lot of money.
Yeah. Trump has a problem. Start looking under the couches.
This report is based on original reporting by Jose Pagliery of the Daily Beast.
Editor’s note: This is an opinion column that solely reflects the opinions of the author
Jason Miciak is an associate editor and opinion writer for Occupy Democrats. He's a Canadian-American who grew up in the Pacific Northwest. He is a trained attorney, but for the last five years, he's devoted his time to writing political news and analysis. He enjoys life on the Gulf Coast as a single dad to a 15-year-old daughter. Hobbies include flower pots, cooking, and doing what his daughter tells him they're doing. Sign up to get all of my posts by email right here: