New York Attorney General Letitia James is taking action to nullify the $175 million bond that former President Trump obtained to delay payment of a larger monetary judgment in his civil fraud case.
In court filings on Friday, April 19, state attorneys argued that Trump and his co-defendants, including the Trump Organization and his two eldest sons, failed to demonstrate that the surety used for the bond actually has the necessary funds to back it up.
They also claimed that the defendants did not provide sufficient and identifiable collateral to support the bond.
In a 26-page filing, lawyers from James’s office requested the court to reject the defendants’ motion to justify the surety, declare the bond ineffective, and order a replacement bond to be posted within seven days.
Trump’s bond was secured by the California-based Knight Specialty Insurance Company. However, state lawyers argued that Knight, being a small insurer not authorized to do business in New York, lacks the financial capacity to support such a large bond. The company’s total policyholder surplus is only $138 million, far below the bond amount.
Furthermore, the state highlighted that Trump still has access to the $175 million in cash he deposited as collateral, questioning the sufficiency of the assets backing the bond.
Earlier this year, Judge Arthur Engoron ruled that Trump and his associates conspired to manipulate Trump’s net worth for tax and insurance benefits, ordering them to pay a total of $464 million plus interest.
Trump’s bond prevents James’s office from collecting the judgment while the defendants appeal, and it also halts other penalties.
A hearing is scheduled for Monday to address the concerns raised by the attorney general’s office, coinciding with the commencement of Trump’s New York criminal trial.
