A New York appeals court has agreed to hold off collection of former president Donald Trump’s 454 million dollars civil fraud judgment — if he puts up 175 million dollars within 10 days.
If he does, it will stop the clock on collection and prevent the state from seizing the presumptive Republican presidential nominee’s assets while he appeals.
The appeals court also reversed other aspects of a trial judge’s ruling that had barred Trump and sons Eric Trump and Donald Trump Jr from serving in corporate leadership for several years.
In all, the order was a significant victory for the ex-president as he defends the real estate empire that vaulted him into public life.
The development came just before New York Attorney General Letitia James, a Democrat, was expected to initiate efforts to collect the judgment.
Mr Trump, who was attending a separate hearing in his criminal hush money case in New York, posted on his Truth Social platform that he would post a bond, securities or cash to cover the 175 million dollars sum.
“This also shows how ridiculous and outrageous” trial Judge Arthur Engoron’s judgment was, Mr Trump wrote.
Ms James’ office, meanwhile, noted that the judgment still stands, while collection is paused.
“Donald Trump is still facing accountability for his staggering fraud. The court has already found that he engaged in years of fraud to falsely inflate his net worth and unjustly enrich himself, his family, and his organisation,” the office said in a statement.
Mr Trump’s lawyers had pleaded for a state appeals court to halt collection, claiming it was “a practical impossibility” to get an underwriter to sign off on a bond for such a large sum, which grows by the day because of interest.
The Trump attorneys had earlier proposed a 100 million dollars bond, but an appellate judge had said no late last month.
The ruling was issued by the state’s intermediate appeals court, the Appellate Division of the state’s trial court, where Mr Trump is fighting to overturn a judge’s February 16 finding that he lied about his wealth as he built the real estate empire that launched him to stardom and the presidency.
After Ms James won the judgment, she did not seek to enforce it during a legal time-out for Mr Trump to ask the appeals court for a reprieve from paying up.
That period ended on Monday, though Ms James could have decided to allow Mr Trump more time.
Ms James told ABC News last month that if Mr Trump does not have the money to pay, she would seek to seize his assets and was “prepared to make sure that the judgment is paid”.
She did not detail the process or specify what holdings she meant, and her office has declined more recently to discuss its plans. Meanwhile, it has filed notice of the judgment, a technical step toward potentially moving to collect.
Seizing assets is a common legal option when someone does not have the cash to pay a civil court penalty. In Mr Trump’s case, potential targets could include properties such as his Trump Tower penthouse, aircraft, Wall Street office building or golf courses.
The attorney general also could go after his bank and investment accounts. Mr Trump maintained on social media on Friday that he has almost 500 million dollars in cash but intends to use much of it on his presidential run.
He has accused Ms James and New York state Judge Arthur Engoron, who is also a Democrat, of seeking “to take the cash away so I can’t use it on the campaign”.
One possibility would be for Ms James’ office to go through a legal process to have local law enforcement seize properties, then seek to sell them off. But that is a complicated prospect in Mr Trump’s case, noted Stewart Sterk, a real estate law professor at Cardozo School of Law.
“Finding buyers for assets of this magnitude is something that doesn’t happen overnight,” he said, noting that at any ordinary auction, “the chances that people are going to be able to bid up to the true value of the property is pretty slim.”
Mr Trump’s debt stems from a months-long civil trial last fall over the state’s allegations that he, his company and top executives vastly puffed up his wealth on financial statements, conning bankers and insurers who did business with him.
The statements valued his penthouse for years as though it were nearly three times its actual size, for example.
Mr Trump and his co-defendants denied any wrongdoing, saying the statements actually “low-balled” his fortune, came with disclaimers and were not taken at face value by the institutions that lent to or insured him. The penthouse discrepancy, he said, was simply a mistake made by subordinates.
Mr Engoron sided with the attorney general and ordered Trump to pay 355 million dollars , plus interest that grows daily. Some co-defendants, including his sons and company executive vice presidents, Donald Trump Jr and Eric Trump, were ordered to pay far smaller amounts. Monday’s ruling also puts those on hold if the 175 million dollars bond is posted.
Under New York law, filing an appeal generally does not hold off enforcement of a judgment. But there is an automatic pause if the person or entity posts a bond that covers what’s owed.
The ex-president’s lawyers have said it is impossible for him to do that. They said underwriters wanted 120% of the judgment and would not accept real estate as collateral. That would mean tying up over 557 million dollars in cash, stocks and other liquid assets, and Mr Trump’s company needs some left over to run the business, his attorneys have said.
Mr Trump’s attorneys asked an appeals court to freeze collection without his posting a bond. The attorney general’s office objected.
