Trump is unable to make US$464 million bond in civil fraud case, his lawyers tell court

Former U.S. president Donald Trump can’t find an insurance company to underwrite his bond to cover the massive judgment against him in the New York attorney general's civil fraud case, his lawyers told a New York appeals court.

Trump's attorneys said he has approached 30 underwriters to back the bond, which is due by the end of this month.

• The information you need to know, sent directly to you: Download the CTV News App

"The amount of the judgment, with interest, exceeds US$464 million, and very few bonding companies will consider a bond of anything approaching that magnitude," Trump’s lawyers wrote. (Trump himself was fined US$454 million; the US$464 million includes the disgorgement for his adult sons Don Jr. and Eric.)

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."

Potential underwriters are seeking cash to back the bond, not properties, according to Trump’s lawyers.

Trump’s 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 exceed the judgment. If the appeals court rules against him, Trump asked the court to delay his posting the bond until his appeal to New York’s highest court is heard.

Last month, Trump was ordered to pay US$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 wrote in his 93-page decision that Trump and his co-defendants – including his adult sons – were liable for fraud, conspiracy and issuing false financial statements and false business records, finding that the defendants fraudulently inflated the value of Trump’s assets to obtain more favorable loan and insurance rates.

The amount Trump owed surpassed US$450 million with interest included.

Trump is appealing the ruling, but in order to stop the state from enforcing the judgment, Trump has to post a bond to be held in an account pending the appellate process, which could take years to litigate.

Trump posted a US$91.6 million bond earlier this month as part of his appeal in the E. Jean Carroll defamation case.

But Giulietti said some of the biggest underwriters have internal policies that limit them from securing a bond in excess of US$100 million. None of them, he said, including some of the largest insurance companies in the world, will accept real estate – they are only comfortable taking cash or stock.

Including fees and interest, he said Trump would need to come up with more than US$550 million.

"Over the course of my career, during which I have been directly or indirectly involved in the issuance of thousands of bonds, I have never heard of nor seen an appeal bond of this size for a private company or individual," Giulietti said. "After substantial good-faith effort over the last several weeks, obtaining an appeal bond for the Judgment Amount of over US$464 million is just not possible under these circumstances."

Alan Garten, the top legal officer of the Trump Organization, said in a sworn statement that Chubb, which underwrote Trump's US$91.6 million bond to cover the Carroll judgment, could not accept real estate to secure the civil fraud bond.

Garten called the lack of underwriters to accept real estate a “major obstacle” to securing a bond.

Trump campaign spokesman Steven Cheung blasted the size of the fraud judgment.

"A bond of this size would be an abuse of the law, contradict bedrock principals of our Republic, and fundamentally undermine the rule of law in New York," Cheung said. "President Trump will continue fighting and beating all of these Crooked Joe Biden-directed hoaxes and will Make America Great Again." 

This story is breaking and will be updated.