Trump's $175 million bond in civil fraud judgment upheld after AG James demanded it be rejected

 April 23, 2024

Former President Donald Trump let loose on New York Attorney General Letitia James on Monday and blasted her as the "worst attorney general in the country" after she questioned the validity of a $175 million bond he posted to appeal the $454 million civil fraud judgment, the Daily Mail reported.

"I put up $175 million in cash and she's questioning the bonding company," Trump told reporters during a break in his Manhattan criminal trial. "Well, when you put up cash and the number is 175, which is what we're supposed to be putting up, but I give it in cash, she shouldn't be complaining about the bonding company."

He went on to further slam James along with the "crazed" Judge Arthur Engoron and reiterated his complaints about the biased and one-sided civil fraud case that wrapped up in February.

AG James called for rejection of Trump's bond

ABC News reported last week that AG James urged Judge Engoron to reject the $175 million bond that former President Trump had posted through Knight Specialty Insurance Company to cover a portion of the judgment against him in case his appeal of that judgment failed.

In a 26-page filing, James asserted that KSIC was "a small insurer that is not authorized to write business in New York and thus not regulated by the state’s insurance department, had never before written a surety bond in New York or in the prior two years in any other jurisdiction, and has a total policyholder surplus of just $138 million."

She further complained that Trump had failed to prove that he had sufficient collateral to back the $175 million bond as well as that the "cash" behind the bond was located in a brokerage account that Trump still maintained control over and theoretically could swap out that "cash" with less secure assets like mutual funds or stocks.

James also accused KSIC of being a "shadow insurance" company that exploited lax regulations in the Caymen Islands to "reduce its liabilities" and "artificially bolster its surpluses," and argued that the company "is not qualified to act as the surety" and should be excluded, with Trump forced to obtain a similar bond through another provider.

Bond company chairman spoke out about unexpected scrutiny from AG, media

Earlier in April, when AG James first raised her concerns about KSIC, Reuters reported that company chairman Don Hankey, a Trump-supporting billionaire businessman, acknowledged that the "low fee" he charged the former president probably wasn't sufficient to cover the sharp scrutiny he and the company had received from James and the media over the affiliation with Trump, though he also said he had no regrets about backing the bond.

"We thought it would be an easy procedure that wouldn't involve other legal problems and it's not turning out that way. We probably didn't charge enough," Hankey said. "We have been getting a lot of emails, a lot of phone calls. Maybe that's part of the reason he had trouble with other insurance companies."

Hankey, who is reportedly worth around $7.4 billion and achieved much of his wealth through the provision of subprime auto loans, added at the time, "I'm surprised they're coming down harder on our bond or looking for reasons to cause issues with our instrument."

Bond deal approved with some modifications

According to Courthouse News, last week's filing from AG James led to a hearing on Monday with Judge Engoron that ultimately resulted in the KSIC bond being accepted, albeit after some of the terms of the arrangement were altered in a deal reached between state prosecutors and former President Trump's defense team.

The deal allowed the $175 million bond to stand on the condition that Trump relinquish to KSIC all control of the brokerage account that held the "cash" assets upon which the bond was written.

Engoron reportedly said the whole thing "seems like a house of cards to me," but Trump's attorney Chris Kise said the judge's doubts were fueled by a "conspiracy theory" and "hypothetical" situations that were blown out of proportion, and added, "The bottom line is this is just about language in an agreement that probably could have been worked out without the necessity of a hearing."

After word of the hearing's result reached Trump at his Manhattan criminal trial, he told reporters outside the courtroom, "The deal was approved with the attorney general, if you can believe that, but the deal was approved," and added, "She shouldn't be complaining about the bonding company. The bonding company would be good for it because I put up the money. I have plenty of money to put up."

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