New York court to allow Donald Trump to post lower bail in civil fraud case

NEW YORK — A New York appeals court agreed Monday to halt collection of former President Donald Trump's civil fraud judgment of more than $454 million if he pays $175 million within 10 days.

If Trump does so, it will stop the collection process and prevent the state from seizing the presumptive Republican presidential nominee's assets while he appeals. The appeals court also overturned other aspects of a trial judge's ruling that barred Trump and his sons Eric Trump and Donald Trump Jr., executive vice presidents of the family business, from run the company for several years.

Overall, the order constitutes a significant victory for the former Republican president as he defends the real estate empire that propelled him into public life. This development occurred just before New York Attorney General Letitia James, a Democrat, launched efforts to secure the judgment.

Trump, who was attending a separate hearing in his hush money criminal case in New York, welcomed the ruling and said he would post bond, securities or cash to cover the $175 million sum in the civil case. Speaking in a courthouse hallway, Trump returned to his oft-made complaints about civil trial Judge Arthur Engoron and the punishment he imposed.

“What he did was a great disservice and it should never happen again,” said Trump, who says the fraud case is discouraging business in New York.

James' office, meanwhile, noted that the judgment still stood, even if collection was suspended.

“Donald Trump must still answer for his staggering frauds,” the office said in a statement.

Trump's lawyers had argued for a state appeals court to end the collection, saying it was “virtually impossible” to get an underwriter to sign a bond for such a large sum, which is growing every day due to interest. Trump's lawyers had previously proposed $100 million bail, but an appeals judge said no late last month.

Monday's ruling came from a five-judge panel of the state's intermediate appeals court, called the Appellate Division, where Trump is fighting to overturn Engoron's Feb. 16 decision. Trump's lawyers, Alina Habba and Christopher Kise, called Monday's ruling a key first step.

Siding with the attorney general after a months-long civil trial, Engoron found that Trump, his company and his top executives lied about his wealth on financial statements, defrauding bankers and insurers who did business with him. The statements valued Trump's penthouse for years as if it were nearly three times its actual size, for example.

Trump and his co-defendants have denied any wrongdoing, saying the statements actually reduced his fortune, came with disclaimers and were not taken literally by the institutions that lent or insured him . The penthouse discrepancy, he said, was simply a mistake made by subordinates.

Engoron ordered Trump to pay $355 million, plus interest. Some co-defendants, including Donald Trump Jr. and Eric Trump, were ordered to pay much lower amounts. Monday's ruling also puts those on hold if the $175 million bond is posted.

After James obtained the judgment, she did not seek to enforce it during the legal period given to Trump to ask the appeals court for a stay of payment.

That period ended Monday, although James could have decided to give Trump more time.

James told ABC News last month that if Trump didn't have the money to pay, she would seek to seize his assets. She did not detail the process or specify which titles she was talking about, and her office recently declined to discuss her plans. In the meantime, the office has filed a notice of judgment, a technical step toward a possible recovery process.

Trump claimed on social media Friday that he had nearly $500 million in cash, but he said at a news conference Monday that he would like to be able to use some of it in his presidential campaign. He claimed that James and Engoron, who is also a Democrat, “don't want me to take money out to use for the campaign.”

If the sanction ultimately stands, the attorney general could go after Trump's bank and investment accounts. It is also possible to go through a legal process to seize properties such as his Trump Tower penthouse, his airplane, his Wall Street office building or his golf courses, and then seek to sell them.

But it could be complicated in Trump's case.

“Finding buyers for assets of this magnitude doesn’t happen overnight,” noted Stewart Sterk, a real estate law professor at the Cardozo School of Law.

Under New York law, filing an appeal generally does not delay enforcement of a judgment. But there is an automatic break if the person or entity posts a bond covering what is owed.

Many defendants can get such bail, but “judgments of this magnitude are rare,” said Joshua Naftalis, a former federal prosecutor now in private practice.

“What makes this one unusual is someone who is subject to a huge amount of money and has to come up with it themselves,” Naftalis said.

The ex-president's lawyers said the underwriters wanted 120% of the judgment and would not accept real estate as collateral. That would mean tying up more than $557 million in cash, stock and other liquid assets, and Trump's company needs a bit of surplus to run the business, his lawyers said.

They asked an appeals court to freeze the collection without him posting bond. The attorney general's office objected, saying it had not explored all options to cover the amount.

The appeals court “took a middle path” by still requiring Trump to provide money but reducing the amount, Naftalis said.

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Investigative journalist Dan Krauth talks to those responsible for the squatting breach.

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