The New York Attorney General’s Office and Donald Trump’s lawyers have come to an agreement on Monday, which allows the former president to keep his $175 million bond under specific conditions. This outcome is considered a victory for Trump, although James’ office expressed satisfaction with the final result.
Attorney General Letitia James requested New York Judge Arthur Engoron on Friday to invalidate the bond provided by Knight Specialty Insurance Company (KSIC) based in California. The request was made due to the company not being regulated by the state’s insurance department and its lack of experience in writing surety bonds in New York or any other jurisdiction in the past two years.
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“President Trump is pleased with the court’s decision, despite the attorney general’s flawed and desperate protest,” stated Trump attorney Christopher Kise in an email to Newsweek. Kise emphasized that the court acknowledged the full value of the $175 million in cash that was posted and confirmed the acceptability of the bond form that has been used in the New York court system for over a century.
The Context
In March, Engoron made a ruling that held Trump responsible for a payment of $454 million. This amount includes $355 million in penalties, along with almost $100 million in interest.
In 2022, James, the one who initiated a civil fraud lawsuit against the former president and presumptive Republican presidential nominee, accused Trump, his adult sons, and The Trump Organization of inflating his net worth and property value. The lawsuit claims that they did this in order to secure more favorable loan and insurance terms.
Before entering Monday’s trial proceedings in Manhattan for his criminal hush money case involving alleged financial payments to adult film actress Stormy Daniels before the 2016 election, which Trump denies, he addressed the press and criticized James.
“I invested $175 million in cash, but she dismissed the bonding company as unreliable,” Trump stated. He expressed concern that people would be hesitant to listen to or invest in New York City, leading to a potential exodus of businesses. Trump described the city as inhospitable and unfriendly for conducting business.
He labeled her as “the most inept attorney general in the entire nation.”
What We Know
James called on Engoron to invalidate the $175 million bond that the former president submitted to appeal his New York civil lawsuit on Friday.
According to the attorney general’s legal filing, the argument made is that Trump’s pledge to “true-up” his collateral by adding funds from a Schwab brokerage account is merely a promise and holds no legal weight. This is because the former president cannot legally act as his own surety.
Trump and KSIC recently submitted a motion, supported by various documents, asserting that the bond was financially secure and backed by the former president’s cash. They argued that James had falsely objected to the bond and requested Engoron to hold her responsible for the legal fees involved.
Engoron questioned Trump’s lawyer, Christopher Kise, on Monday, regarding whether Schwab violated the agreement.
Here are some other provisions that are included in the deal:
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- The $175 million in collateral will stay as cash and will not be swapped for mutual funds or other financial instruments.
- The money cannot go anywhere else, like a lockbox.
- Trump and KSIC will provide a monthly account statement (reflecting $175 million in cash) to James’ office and the court.
- The agreement between Trump and KSIC cannot and will not be amended without approval from the court.
- KSIC will submit to the jurisdiction of New York State Supreme Court in New York County, will waive its right to removal (to move a case to federal court or another jurisdiction), and will officially designate an agent of process in New York. That means that KSIC, though based in California, will officially designate someone who is able to accept legal service on their behalf in New York.
Views
Neama Rahmani, president of the West Coast Trial Lawyers law firm and a former federal prosecutor, expressed his surprise at the decision in a phone interview with Newsweek.
According to Rahmani, Trump is essentially providing the funds, which is actually more advantageous than a bond. As long as he keeps the money in the account, Letitia James has no grounds to take any action. This situation greatly limits her options.
According to the attorney general’s office, the provisions set for Knight to oversee the bond offer a solid resolution to the case. James acknowledges that there is little else he can do in this situation, as Trump has provided the full cash amount.
What’s Next
The closure of this agreement marks the end of the civil fraud case.
