Attorneys representing Donald Trump will be returning to court on Monday to defend the $175 million bond in the former president’s civil fraud case. This comes after New York Attorney General Letitia James called for the court to reject the bond and provide Trump with a seven-day opportunity to secure a new one.
In a recent hearing, Judge Arthur Engoron granted James’ request to examine the collateralization of the bond provided by Knight Specialty Insurance Company. James expressed concerns regarding the bond and its ability to cover the $464 million judgment in the event that Trump’s appeal is unsuccessful.
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The bond hearing is a crucial event for the former president as it marks the beginning of his criminal hush money trial. On Monday morning, he is obligated to be present for the opening statements. Simultaneously, down the street at the criminal courthouse, Judge Engoron will consider arguments that could have severe financial consequences for the former president if the bond is denied.
In February, the saga of Trump’s bond commenced when Engoron ruled that the former president, along with his co-defendants, must pay a staggering $464 million in disgorgement and prejudgment interest. Engoron determined that Trump had been involved in a decade-long business fraud. Trump sought to postpone the payment, arguing before an appellate court that finding a surety willing to handle such a substantial bond was practically impossible.
If Trump fails to pay the judgment on time, James has made it clear that she will take action by seizing his assets, which includes his namesake buildings.
James, in an interview with ABC News, mentioned that if the individual lacks the necessary funds to settle the judgment, they will pursue legal avenues for judgment enforcement and request the judge to seize the person’s assets.
At the deadline for paying the judgment, the Appellate Division First Department in New York granted former President Trump’s last-minute plea to decrease the bond amount. As a result, he was allowed to post a bond of $175 million.
Days later, Trump and his co-defendants put up a $175 million bond. This bond was collateralized using $175,304,075 held in a Charles Schwab brokerage account. The account was under the control of the Donald J. Trump Revocable Trust.
James filed a notice requiring Knight Specialty Insurance to demonstrate their ability to pay the bond if necessary, as the company behind the bond was not admitted in New York.
According to the recent court filing, attorneys representing Knight Specialty Insurance and Trump stated that KSIC is a reputable and financially stable insurer based in Delaware. They have been involved in underwriting various types of insurance, including surety bonds, across the United States.
According to the filing, Knight has secured the bond using over $175 billion held in a brokerage account under their control. Additionally, Knight maintains over $539 million in their own assets. The filing also reveals that the company has access to more than $2 billion in assets through their parent company.
According to the filing, KSIC has given the Plaintiff judgment creditor the assurance that she will be able to collect the specified amount if the award is upheld on appeal.
The New York Attorney General filed a document on Friday, contending that the bond should be dismissed. The argument made was that the defendants did not provide sufficient evidence of Knight’s ability to manage such a substantial task and that the bond lacked adequate collateral.
According to James’ filing, Knight does not possess the sole authority to manage the funds in Trump’s brokerage account. This could pose a problem if the account’s assets fall below $175 million. James also highlighted concerns regarding Knight’s business practices, suggesting that these practices should disqualify the company from conducting business in New York.
According to the filing, KSIC is not eligible to serve as the surety under this standard due to federal authorities discovering that its management has operated affiliated companies within KSIC’s holding company structure in violation of federal law on multiple occasions in recent years.
Don Hankey, the chairman of Knight Specialty’s parent company, chose not to comment on the attorney general’s recent filing on Friday.
During an interview with ABC News on April 4, he confidently expressed that he had absolutely no concerns about the bond.
“Our applications and bonds rarely face rejection. It seems like they undergo thorough scrutiny, ensuring every detail is meticulously reviewed,” Hankey explained. “They leave no stone unturned, making sure all the i’s are dotted and the T’s are crossed. Considering the substantial amount involved, it’s understandable.”
