Trump's Liquidity Problem for His Massive Bond

Trump couldn't pay 450 million maybe now he can pay a mere 175 million Donald Trump famously crowned himself the king of debt nobody knows more about debt than I do well he probably didn't mean it like this because at the moment he's staring down a mountain of pain over $600 million in judgments fines penalties in interest and it's getting worse every day every day that passes means about $100,000 more in interest now as you probably know on February 16th New York judge Arthur Enron ordered Trum

p to pay $355 million plus $98 million interest in fraud damages for manipulating yearly financial statements to obtain favorable loans and insurance premiums for the Trump organization this came weeks after a jury in a separate civil case in New York federal court ordered Trump to pay 83.3 million for defaming writer egene Carroll and that's on top of the $5 million that Trump has ordered to pay in a separate defamation case of Carrol's so facing over a half billion dollars in judgments and his

entire business Empire at risk this will be a test of Trump's decades long superpower of weaseling out of any actual consequences for his actions but today we're going to answer the question that's on everyone's mind how is Trump going to pay for these judgments or at a minimum how is he going to get a bond to stay execution to these judgments pending the outcome on appeal can his supporters or the Republican National Committee pick up the tab could a random billionaire I don't know I'm not thi

nking of anyone in particular and what if Trump just refuses to pay so with judgments and deadlines looming Trump has some big decisions to make the first procedural step is the post verdict entry of judgment after the judgment is finalized step two is posting a bond and filing an appeal if a bond isn't posted or Trump exhausts all of his appeals then we go to the final step Collections and enforcement of judgment so let's dig a Little Deeper on February 8th judge L Kaplan finalized the 83.3 mil

lion Carol judgment Trump had 30 days in both the Carrol case and the New York fraud case to appeal in an effort to lower or overturn the amount awarded as a result team Trump had been fighting to stop the clock in both cases with mixed results in a February 21st letter to judge Enron Trump's lawyers accuse Attorney General James of being in an quote unseemly rush to memorialize the judgment and requested a 1-month delay in finalizing it in an emailed response to Trump Council Clifford Robert ju

dge angron curtly denied the request quote you have failed to explain much less justify any basis for a stay I'm confident that the appet division will protect your appet rights on February 23rd the county clerk signed the Trump civil fraud judgment making it official that same day Trump's lawyers filed a motion requesting a stay of the latest Carol judgment for at least 30 days after quote forthcoming post-trial motions which will be filed no later than March 7th in the 21 page filing Trump's l

awyers argued that the $65 million damages award and the $18.3 million in compensatory damages was plainly excessive in violation of the Constitution and federal common law quote there's a strong probability that the disposition of post-trial motions will substantially reduce if not eliminate the amount of the Judgment judge Kaplan denied the day while inviting Carol to respond as the 30-day clock to appeal continue to run so let's dive into what's happened in these appeals the Carol cases are i

n federal court so any appeal would be heard by the second circuit and in the state fraud cases Trump could appeal to the Appel Division and then to the New York Court of Appeals which for reasons that are beyond my understanding is the high Court in New York whereas the Supreme Court of New York is uh the lower trial court it is theoretically possible that Trump could appeal at least the Carol cases to the US Supreme Court but that's extremely unlikely the various courts of appeal give great de

ference to the lower courts and likely would only disturb the factual findings of the lower courts if they are quote clearly erroneous and given the detailed factual findings of these cases that would be a very heavy burden for Trump to climb so Trump is likely to focus on issues of Law and constitutional interpretation because appet courts review these issues to Novo meaning that they give no deference to the uh rulings of the lower courts but you can ignore all of that procedural stuff because

here's the most important thing that you need to know under New York lot a person must first secure an appeal Bond or place a cash deposit that amounts to 110% of the Judgment in order to stay the enforcement of the Judgment during the appeals process now technically you don't need to post a bond just to appeal you can do that for free but you do if you want to temporarily postpone the enforcement of the Judgment which is the thing that most people really want to stop at least while their appea

l is pending though they'd like to stop it after their appeal is done but at that point they don't have a choice after all if you win the appeal it would have been really unfortunate to sell off all your personal belongings to satisfy the Judgment only to try to claw that back after you win the appeal and on the other hand the deposit ensures that the appealing party pays if they lose while protecting the court from frivolous appeals or bad faith delays now following the first Carol verdict Trum

p gave the court a cash deposit of $5.6 million but for the second Carol verdict Trump opted to secure an appeal Bond instead after his initial efforts to stay the Judgment failed Trump posted a 91.6 million bond from chub's federal insurance company on March 8th so while Carol is now prevented from immediately collecting either award chub is now contractually obligated to pay Trump's 91 plus million award if Trump loses the appeal and fails to pay so that's a really good position for Carol to b

e in she's guaranteed to get paid if she wins the appeal so while a lot of people wanted Carol to force Trump to sell off some real estate to pay the Judgment she's in a much better position having a guaranteed payout and in that situation chub becomes subg to Trump if chub pays out the $91 million they can then go after Trump himself chub CEO Evan Greenberg said that providing a bond quote has nothing to do with the underlying merits or with favoring any of the parties in this case as assurity

we don't take sides it would be wrong for us to do so and we are in no way supporting the defendant Greenberg also said that the bond is fully collateralized and that the company can be made whole if necessary and reports are that the 91 Mill doll bond is collateralized by Trump's Schwab account likely full of very liquid assets like cash or stocks so if Trump loses and chub pays out it's extremely likely that chub will be able to recover 100 cents on the dollar by just liquidating Trump's bank

account but foreshadowing that's not the case for the fraud judgment and for the fraud case Trump would need a bond of more than $540 million at a cost of around 1 to 3% of the bond amount and more foreshadowing it's likely that the main other assets that Trump has are commercial real estate but you might have noticed that ever since the pandemic nobody really wants commercial real estate and now Trump has been granted a reprieve on March 25th a five judge panel of New York's appella division re

duceed the bond amount and stay other provisions of Judge enron's order the appella judges reduced the bond by 60% the order says quote it is ordered that the motion is granted to the extent of staying enforcement of Those portions of the Judgment one ordering discouragement to the Attorney General of $464 million conditioned on defendant appellant posting within 10 days of the date of this order and undertaking in the amount of $175 million to permanently barring defendants weiselberg and McCon

e from serving in the financial control function of any New York Corporation or similar business entity three barring defendants Donald J Trump weberg and McCone from serving as an officer or director of any New York Corporation for three years four barring defendant Donald J Trump and the corporate defendants from applying for loans from New York financial institutions for three years and five barring defendants Donald Trump Jr and Eric Trump from serving as an officer or director of any New Yo

rk Corporation in New York for 2 years the enforced state is conditioned on defendant appellant perfecting the appeals for the September 2024 term of this court now what circumstances Justified such a major departure from the Judgment the order doesn't include any legal reasoning but we can assume that the court agreed with Trump that he'd suffer irreparable harm if he was forced to sell his babies which is what he called his properties over the weekend not his children which does make some sens

e because if the state seized Trump's properties and sold them he wouldn't be able to get them back even if he won the appeal so that was likely enough for the court to rule in his favor but where did the $175 million figure come from from well we have no idea the court probably wanted Trump to be able to post a bond and the vibe suggested that he could come up with bond in that amount so now Trump gets 10 days from March 25th to post the $175 million Bond and Trump quickly thanked the appella j

udges for their hard work so I greatly respect the decision of the appell division and I'll post either $175 million in cash or bonds or security or whatever is necessary uh very quickly within the 10 days now that's a lot less than the $500 million plus that he was going to have to put forward before so maybe he can do it though Trump represented to the court that no one would accept real estate as collateral for a bond except for chub but it is possible that this amount is high enough that he

still needs to use real estate which if what he said was true then he'd have to go back to chub now before the appeals court saved the day Trump appeared to be in hot water for publicly stating things that contradicted his legal filings his legal team told the court that he didn't have the cash to put up the bond and had to ask for shy companies and they all said no but on Truth social Trump said he did have the cash but he didn't want to use it because instead he was saving it for his president

ial campaign quote through hard work talent and luck I currently have over $500 million in cash a substantial amount of which I intend to use in my campaign for president now having a client directly contradict your sworn statements to the court is every lawyer's worst nightmare people who work for the Trump organization including Chief Financial Officer Alan Garden submitted declarations to the court swearing under oath that Trump does not have the financial means to post a bond of 120% of the

J judgement and since Trump contradicted the official declarations a court could have and might still have accused the officers of the Trump organization of submitting false statements to the court uh which would never be a good look the Trump merger was approved and Trump's share could be worth billions if he's allowed to cash out now lockout rules generally prevent the large shareholders from doing so but it looks like those rules could be relaxed by the board which is controlled by Trump and

his cronies so it's entirely possible that he could change the bylaws cash out and tank the stock while lining his pockets but this is Trump we're talking about he'd never do that right and while you might remember that Trump's fraud judgment barred him from obtaining loans from any financial institution a chartered by or registered with New York that part of the order was put on hold by the appella division on February 28th so we don't know how much liquid cash Trump has or if he has enough to

cover the judgments or the bonds it would be exceedingly difficult to turn his real estate into a bond and eventually to satisfy the judgments which leads to the possibility of just some other billionaire footing the bill here especially given a very interesting flight that Elon Musk took to Palm Beach not too long ago and yeah there's no law against third parties paying you or judgment for you even a judgment worth $500 million though I do wonder about the tax treatment of a third party satisfy

ing your judgment on your behalf it kind of seems like that would be treated as income by the IRS meaning that you'd have to pay taxes probably at the top marginal rate on the entire hundreds of millions of dollars which would mean you'd still owe hundreds of millions of dollars of taxes even though the original hundreds of millions of dollars were satisfying the Judgment but we'll cross that bridge when we get to it so far it doesn't seem like there are any billionaire takers much the shrin of

some commentators now if you've defrauded the state of New York you'll need a good lawyer but if you want a great lawyer my firm the eagle team can help if you've had an injury or death in the family suffered a data breach especially if you got one of those privacy letters or we're involved in a car crash we can represent you or help find you the right attorney it's so important to talk to a lawyer early in the process so you can learn what your options are and maximize your recovery so just cli

ck on the link in the description or call the number on screen for a free consultation with my because you don't just need a legal team you need the eagle team so click below but then there's the possibility of the Republican National Committee Trump's campaign or his super packs uh helping him out as of February 2024 Trump's political action committee save America Trump's presidential campaign and his other fundraising organizations have spent $ 76.7 million on his behalf in legal fees over the

last two years and while it is a giant open question whether he's allowed to do that uh Trump would likely be barred from using those same funds to pay actual legal judgments uh under federal law candidates are prohibited from using campaign funds for personal use and to differentiate between legitimate campaign expenses and personal expenses the FEC applies the irrespective test and under that test personal use is a use of funds to fulfill a commitment obligation or expense of any person that

would exist irrespective of the candidate's campaign or responsibilities as a federal office holder now Trump has claimed that these Witch Hunt lawsuits and prosecutions are politically motivated allowing him to use campaign funds uh for the legal fees and because the FEC is basically been destroyed from the inside that statement hasn't really been challenged but it's pretty clear that he could not use campaign funds to satisfy the judgments a judge Kaplan has previously ruled that Trump's defam

atory statements in the Carol matter were not within the scope of his presidential duties and the Civil fraud judgments relate to conduct unrelated to him being president of the United States but what if Trump decides not to pay at all as we know Trump has a long history of not paying his bills whether they're contractors cities that host rallies or Rudy Giuliani so what happens if Trump just refuses to pay well if a party fails to have the appell court stay the Judgment or loses their appeal uh

the judgment is enforceable and at that point the state could Levy and sell his assets they could put a lean on his real property or they could garnish his future income and a few days after the verdict New York AG Laticia James told ABC news that she was ready to seize the former president's assets uh if he's unable or unwilling to pay the Judgment quote if he does not have funds to pay off the Judgment then we will seek judgment enforcement mechanisms in court and we'll ask the judge to seize

his assets and while the case against Trump and his businesses is relatively novel ceasing and defendant assets to pay a judgment is a common legal tactic for both state and private actors a for example OJ Simpson's Heisman Trophy was famously seized in sold at auction in 1999 after the families of Ron Goldman and Nicole Brown Simpson won a 33.5 million wrongful death lawsuit against the ex- football player turned murderer so both the state of New York and Ean Carroll could also attempt to seiz

e Trump's assets and pay their respective judgments and in addition to asset seizure failure to comply with a court order to pay could result in someone being held in contempt and hit with additional fines imprisonment for non-payment of judgment is technically possible but it's not likely now if Trump can't raise the funds he needs there is that one weird trick to Halt Court proceedings And Delay enforcement for years and maybe even get those liabilities greatly reduced and that is declare bank

ruptcy now Trump is no stranger to bankruptcy he has previously filed chapter 11 bankruptcy for six of his failed businesses this allowed him to stop creditors from collecting while each company reorganized their business and restructured their debts but the one thing that Trump has never done is file for personal bankruptcy in chapter 11 personal bankruptcy proceedings the trustee and the judge overseeing the case would work to extract the maximum value from the businesses bank accounts and oth

er assets and the court would have to approve any reorganization and payment plan which could include declaring some debts dischargeable meaning that the dtor is no longer liable for the amount due however the bankruptcy court could block Trump outright from discharging at least the Carol defamation judgment for example in October 2023 a Texas judge ruled that Alex Jones could not discharge over $1 billion in defamation judgement debt because the bankruptcy code excludes debts incurred as a resu

lt of willful and malicious conduct and as for Trump's fraud judgment section 523 the bankruptcy code exempts from discharge any debt for money Property Services or an extension renewal or refinancing of credit to the extent obtained by false pretens is a false representation or actual fraud and there's a reasonable argument that that provision would apply to the New York civil fraud judgment so Trump now faces a March 25th deadline to post a bond for over 100% of the judgment to put it on hold

while he appeals if he can't poost a bond the appeal will still move forward but the New York attorney general can begin enforcing the Judgment though the Trump organization in a plea for Mercy has detailed how hard it has been to try to get a bond quote defendants have devoted a substantial amount of time money and effort toward obtaining a bond for the Judgment despite the foregoing defendants have faced what have proven to be insurmountable difficulties in obtaining the appeal bond for the fu

ll 464 million critical among these challenges is not just the inability and reluctance of the vast majority of shes to underwrite a bond for this unprecedented sum but even more significantly the unwillingness of every shy Bond provider approached by defendants to accept real estate as collateral the company has apparently approached more than 30 shy companies proposing to pledge as collateral accommodation of cash or cash equivalents and unencumbered real estate holdings uh but there were no t

akers probably because most Brokers don't have the financial resources to handle a bond of such magnitude and those willing to do so are unwilling to accept the risk associated with such a large Bond and that includes chub the insurance company that provided Trump's 91.6 million appeal Bond uh in the egene Carol civil defamation suit and according to the Trump ganization chub was negotiating with Trump to post a bond but the company changed its mind after the news of the Carol Bond became public

and then chub apparently told the Trump defendants that they could not accept real property as collateral and that's the biggest problem that Trump has he needs cash his reply brief in support of the state application says the bonding companies uh will not accept hard assets such as real estate as collateral but will only accept cash or cash equivalents such as marketable Securities but I mean come on guys Trump is good for it right moreover they complain that charties would typically quote req

uire collateral of approximately 20% of the amount of the Judgment which would require defendants to hand over collateral in the form of cash or cash equivalence of approximately $557 million and the defendant argue that courts routinely wave or reduce Bond requirements when securing the bond is not practicable and that's exactly the scenario that they find themselves in now they accuse latia James of being ignorant of the Practical realities of running a business saying that she quote speculate

s without evidence and revealing her misunderstanding of basic business practices that shes might accept an irrevocable letter of credit as collateral but any such iloc would still typically have to be fully backed by cash or cash equivalent obtaining such cash through a fire sale of real estate holdings would inevitably result in massive irrevocable losses textbook irreparable injury which is why such a fire sale is Trump's worst nightmare prized properties such as Trump Tower iconic properties

like 40 Wall Street to pursue his appeal is Manifest Injustice and it deprives him of that due process that we are all entitled to so imagine you can't reverse selling off Trump Tower on a fire sale at a discounted price we can't fix that if we win on an appeal so it's complete Injustice though in that same interview for some reason she didn't rule out the possibility that they had look to Russia or Saudi Arabia for backing um is there any effort on the part of your team to secure this money th

rough another country Saudi Arabia or Russia as Joy bear seems to think well there's rules and regulations that are public I can't speak about strategy now you'll know that the correct answer there was just no just the wor worst lawyers but the state has pushed back on Trump's claim that James wants a fire sale on Trump properties in its s reply to Trump's motion for a stay the state says that many of Trump's properties are encumbered by huge mortgages and the state has no interest in taking tho

se on quote defendants subject to a possible fire sale if they were to sell assets to generate cash to use as collateral for a bond or as a deposit but the alternative would be to shift the risk of executing on defendants illiquid assets to oag and how encumbered are those properties well probably extremely encumbered Lisa Rubin points out that axos banks' loans to Trump for Trump tow commercial portion and the Dural Golf Course are much bigger than Trump originally claimed both loans are listed

as over 50 million on Trump's August 2023 office of government ethics disclosure but according to the Washington Post those loans are for 100 million and 125 million respectively so the state could force a foreclosure sale on Trump Tower but the proceeds would have to pay off those loans first and if there's any money left over after the lean holders are paid off then it would be used to satisfy the Judgment but James says that the state isn't eager to take on the debt associated with Trump Tow

er quote if the defendants were truly unable to provide an undertaking they at a minimum should have consented to have their real estate interest held by the Supreme Court to satisfy the Judgment as James notes the rules allow the court to hold the Assets in something resembling escrow which makes sense she probably doesn't want to be responsible for trying to sell that real property meanwhile James has lots of other Trump properties to pick from although we don't know which ones the state would

like to seize first there are some clues that they'd go for Westchester County James registered the Judgment in Westchester County on March 6th although the filing didn't identify which assets the state would pursue registration allows the state to get leans and Westchester county is home to some of Trump's most valuable properties including the Trump National Golf Club Westchester and the Seven Springs estate and in some of the other videos that we've done we've discussed the evidence that Tru

mp drastically overvalued Seven Springs judge Enron found that in 2014 Eric Trump had valued the estate at 161 million even though the appraiser had told them that the development was only worth around 14 million and I guess we might actually find out what the market thinks it's worth now given Trump's obligations in the EEG Carol lawsuits he's still on the hook for those bonds and $175 million on top of those original hundreds of millions of dollars is still a lot of money and it's unclear whet

her Trump will be able to procure the funds to come up with a bond for $175 million as well and if Trump doesn't post the bond in state of New York starts enforcement of the Judgment it'll be very painful for Trump New York has broad Discovery rules that allow a creditor to do deep Discovery into a debtor's finances and if it were me the absolute very first thing that I would ask Donald Trump is uh Hey where's that $500 million in cash that you claim to have but the state of New York would be ab

le to subpoena third parties like Banks accounting firms insurance companies vendors and other business associates which Trump would effectively be unable to stop and the state could also compel Trump to sit for a deposition where lawyers will ask Trump about his bank accounts tax returns and the names of anyone who might owe Trump money and I'm sure the state would also be looking very carefully at whether Trump has been transferring any assets out of his possession to hide them yeah the Trump

te made a whole bunch of sloppy mistakes when they valued their properties the writing really could have used some help which they can get with today's sponsor grammarly now as a content creator I have to do a lot of script writing and as a lawyer I have to do a lot of writing in translating legal jargon into something more readable because grammarly is the AI writing partner that helps professionals write better not more it helps you write faster so you can get stuff done and move on with your

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