The New York attorney general’s office has requested that a judge nullify the $175 million bond secured by former President Trump to temporarily avoid paying the larger monetary damage award in his civil fraud case.
State lawyers argued in court filings on Friday that Trump and his co-defendants, including the Trump Organization and its top executives, failed to demonstrate that the surety used to obtain the bond possesses the funds to back it. Additionally, they claimed that the defendants did not provide evidence that the bond is backed by “sufficiently secure and ascertainable” collateral.
The state lawyers requested that the court deny the defendant’s motion to justify the surety, declare the bond invalid, and order the posting of a replacement bond within seven days, along with any additional relief deemed necessary.
Judge rules against NY attorney general (Credits: Fox News)
Knight Specialty Insurance Company, a California-based firm, secured Trump’s bond. State lawyers pointed out that Knight is a small insurer not authorized to operate in New York and had never previously written a surety bond.
The company has a total policyholder surplus of only $138 million, insufficient to cover the bond amount. Under New York state law, companies like Knight are prohibited from exposing themselves to liabilities or potential losses exceeding 10% of their surplus.
The state argued that because Trump still has access to the $175 million in cash he placed in an account as collateral, the court should find that he and his co-defendants failed to demonstrate that identifiable assets sufficiently collateralize the bond.
NY Attorney General (Credits: The Stock Dork)
Judge Arthur Engoron previously ruled that Trump, the Trump Organization, and top executives conspired to alter Trump’s net worth for tax and insurance benefits, ordering them to pay a combined $464 million plus interest.
Trump’s bond ensures that the attorney general’s office cannot collect the multimillion-dollar judgment against the defendants while they appeal and pause other penalties.
The bond amount was initially set at the full judgment amount but was later reduced by an appeals panel when Trump’s lawyers claimed it would be impossible for the former president to secure a complete bond. A hearing is scheduled for Monday to address the issues the attorney general’s office raised, coinciding with the opening statements in Trump’s New York criminal trial.
