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Business News/ News / World/  Trump Bond Firm Should Offer Proof of Resources, NY Says
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Trump Bond Firm Should Offer Proof of Resources, NY Says

New York Attorney General Letitia James asked an appeals court to require Donald Trump to prove within 10 days that the company providing his $175 million bond in the state’s civil fraud case is financially capable of delivering if his legal challenges fail.

Trump Bond Firm Should Offer Proof of Resources, NY SaysPremium
Trump Bond Firm Should Offer Proof of Resources, NY Says

(Bloomberg) -- New York Attorney General Letitia James asked an appeals court to require Donald Trump to prove within 10 days that the company providing his $175 million bond in the state’s civil fraud case is financially capable of delivering if his legal challenges fail.

The request was made in a filing Thursday by the state, which won a $454 million judgment against Trump in a trial over his asset valuations. The bond puts the judgment on hold while the former president appeals the verdict and the damage award.

Trump arranged the bond on Monday through a California insurance company run by one of his billionaire supporters, Don Hankey. But James said Hankey’s Knight Specialty Insurance Co. isn’t registered with New York’s Department of Financial Services, so either Trump or Knight needs to prove the firm can pay the massive damage award if Trump’s appeal fails.

The state’s demand is the latest twist in Trump’s effort to arrange the bond, which he initially called “unattainable" because it was set at 120% of the judgment. Trump claimed dozens of insurers refused his real estate as collateral and that he didn’t have enough cash. The appeals court lowered the bond to $175 million without saying why, easing the strain on Trump’s finances.

That’s when Hankey, who made his fortune in subprime auto loans, stepped in and offered to help Trump out.

Hankey, reached by phone Thursday, said he hasn’t seen the demand from James, but “it shouldn’t be a problem to satisfy the state’s request."

Trump attorney Alina Habba didn’t immediately respond to a request for comment.

Read More: Trump Got His $175 Million Bond From Billionaire Fan’s Firm

By posting the bond, Trump avoided the prospect of James taking action to seize the real estate mogul’s assets, including high-profile properties in Manhattan.

The niche appeal bond industry was thrust into the spotlight earlier this year after Trump lost two civil trials that led to combined damages of more than half a billion dollars. The court requirement for bonds larger than the actual judgment amount is intended to ensure a trial loser will pay the winner if their appeal fails.

(Updates with comment from bond-firm owner, background on Trump’s search for bond.)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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Published: 05 Apr 2024, 12:05 AM IST
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