Bankruptcy filed by Trump personally or by his associates Companies can be delayed by months or years He has to pay a judgment of nearly $500 million, and that amount is growing with interest. Over $100,000 per day. Federal judges will have the time-consuming task of deciding when and how each creditor, including the states, will be repaid. In the meantime, Trump will be able to focus on his campaign, not his debt.
Trump's lawyers say he doesn't have the funds to secure bail to delay enforcement of his $464 million judgment while he appeals it. No bond company would accept Trump's real estate, which accounts for most of his assets, as collateral.New York if no bonds are issued by Monday. Attorney General Letitia James (Democratic Party) It could move to seize his assets, including bank accounts and real estate, including Trump's Manhattan office tower at 40 Wall Street.
“He'd rather have Letitia James show up with the 40-wall sheriff and make a fuss about it than say he's broke.” One person close to President Trump said. “He's thinking about what's going to be good for him politically. Bankruptcy isn't good for him, but trying to get her to take away his assets is a possibility.”
But filing for bankruptcy is a ploy Trump has used six times before, including six times when he emerged from a chaotic foray into Atlantic City's casino business decades ago. Trump has discussed these corporate bankruptcies on the campaign trail over the past few years, saying he took advantage of tools employed by many smart investors and that he didn't need to file personally.
Bankruptcy attorney Avi Moschenberg said that if he filed for bankruptcy now, he probably “wouldn't have to pay anything until after bankruptcy, which would take several years because of the complexity.” But Moschenberg said interest will likely continue to accrue during bankruptcy.
President Trump's press secretary said he plans to continue fighting the case in court. In a Monday filing, Trump's lawyers asked a panel of appeals court judges to waive the requirement to post bail. The appeals board has not yet issued a ruling.
“This is a motion to halt the unjust, unconstitutional and un-American judgment of New York Judge Arthur Engoron in a political witch hunt brought on by a corrupt attorney general. A bond of this size is above the law. It is abusive, violates the fundamental principles of our country, and fundamentally undermines the rule of law in New York,” spokesman Steven Chan said.
Privately, Trump's lawyers have expressed some optimism about the president. One of the people close to the former president said an appellate judge could decide to reduce the amount of bail he can be held to avoid asset seizure. Trump has consulted his advisers, lawyers and others in recent days about what to do if the courts don't come to his aid, the person said, but no decision has yet been reached.
Last month, New York State Supreme Court Justice Arthur Engoron I found that. Trump, his two eldest sons, and two executives submitted fraudulent financial data to lenders and insurance companies to secure better deals. Mr. Engoron ordered President Trump to pay more than $350 million in penalties and interest. His two sons were each ordered to pay $4 million.
To delay enforcement of the New York judgment while Trump appeals, Trump and his co-defendants must seize that amount in cash or bail. This is a guarantee that a third party will pay Trump's claim if he ultimately loses. To secure these bonds, you must pay 120% of the judgment, or $557 million, and issue more bonds, according to an affidavit from Gary Giulietti, an insurance broker and personal friend of Trump. The company will have to pay $18 million in fees. Giulietti wrote that it would be “practically impossible” to obtain a bond of this size. He did not respond to requests for comment. Lawyers representing Trump's co-defendants in the case did not respond to requests for comment.
This amount is on top of the $91 million bond that President Trump submitted within two weeks for the postponement. Enforcement of judgment in defamation lawsuit lost against author E. Gene Carroll.
Three of his associates said that until recently, Mr. Trump and his advisers had told others that they believed they could secure bail in the New York civil fraud case.
Officials say relief from state appeals courts is the least painful way out of Mr. Trump's predicament.
Richard Porter, a longtime financial lawyer and member of the Republican National Committee who was not involved in Mr. Trump's defense, said New York's experienced judges have argued that New York is a financial center with a commercially savvy court. He said he is concerned about the state's reputation. He said he believed they would view the $500 million judgment against Trump with skepticism. “The appellate court judges are likely to find the damages amount moot and want to say so.”
President Trump may also find banks or very wealthy individuals willing to come to his aid by accepting some of his real estate as collateral to help with bonds or by lending money against his real estate. There is also. But little of Trump's relationship with Wall Street banks remains.Based on his latest work Financial Disclosure, Submitted to Federal Ethics Office As of August, there were only about six loans remaining from a few banks.
“His next best option is to find a billionaire with liquidity and quickly strike a deal with him,” Porter said. “So, if I'm advising that billionaire, the upside is that he can make money and become friends with the guy who's going to be president.'' The downside is, if he loses, It's about being targeted,” he said, referring to President Trump's political opponents.
Mr. Trump does not like to sell his real estate, but he may sell some hotels and golf courses for cash in the coming days. Such transactions typically take weeks to months. The appeals court could also order him to give him more time instead, legal experts said.
“This comes from personal and financial circumstances,” said journalist Timothy O'Brien, who wrote Trump's biography and later served as a political adviser to billionaire Mike Bloomberg, who ran for president as a Democrat in 2020. It's my worst nightmare.'' With little choice, O'Brien expects Trump to lash out even more aggressively in public, she said.
“He'll take it to the base,” he said.
President Trump issued a statement Monday night attacking James and the court as stooges of the Democratic Party, calling the bond amount “unprecedented and unlikely to be applied to anyone, including a successful company like mine.” It is virtually impossible for companies to do so.”
“Bonding companies have never heard of bonds of this size, nor do they have the ability to issue them even if they wanted to,” he said.
Some people under President Trump's influence believe that filing for bankruptcy makes economic sense, even if it is politically problematic.
“What's happening to him and his business right now is exactly why bankruptcy law exists,” one of the people said.bankruptcy filing This could potentially suspend not only fines in fraud cases, but also any penalties. He faces potential liability in a civil lawsuit over his role in the Jan. 6 attack on the Capitol. “It will be a fresh start,” the source said.
President Trump is not currently considering bankruptcy, but longtime aides are known to change his mind.
How much protection will President Trump receive by filing for bankruptcy, and for how long? Whether it survives will depend in part on whether Trump applies personally or on behalf of his company. Experts said bankruptcy would almost certainly halt enforcement of New York state judgments against Trump and his co-defendants, including his business entities. But that may not be a particularly attractive option politically.
He may also choose to file for bankruptcy on behalf of one of his legal entities.
Because Trump's companies are so intertwined with his own finances, a bankruptcy judge could rule that Trump personally is protected in the bankruptcy process and therefore does not have to pay the penalty immediately. Even if only one of Mr. Trump's companies applied for protection. But even if the bankruptcy judge doesn't make such a ruling, the huge judgment in New York will likely be suspended while the court takes time to issue its decision.
To prolong the process as long as possible, President Trump may wait to file until the attorney general moves to begin execution. If President Trump does not post bail next week, it is unclear whether she will do so immediately or wait until an appeals court rules on his request to waive her bail request.
“If you compare this to a football game, he could reduce the playing time to one second before calling a timeout,” said Georgetown law professor Adam J. Levitin.
President Trump has already lost some corporate independence as a result of the New York civil fraud case.a A court-appointed monitor has been overseeing the former president's businesses since late 2022, and a judge ruled in February that companies must get the watchdog's approval before submitting financial information to banks or other third parties. It was decided that it would not.
Filing for bankruptcy means relinquishing further control over the business, which could force us into undesirable sales or other transactions in the future.
He also has to explain himself during campaigns, something he has some experience with.
During the 2015 Republican primary debate, moderator Chris Wallace asked President Trump why he should trust the nation's finances, given that he was bankrupt.his six people The companies filed for bankruptcy in the 1990s and early 2000s after his Atlantic City casinos became insolvent.
Trump responded that, like other successful business owners, he has started hundreds of companies and has only had to use bankruptcy protection a few times. He noted that other gaming companies in Atlantic City have applied for protection as well. The bank he borrowed from was a “murderer,” he said.
“Just as the great people in business you read about every day have used the laws of this country and their branches to do great work for their companies, themselves, and their employees, so have I. “I have taken advantage of the laws of this country. For my family,” he said.
Shayna Jacobs contributed to this report.
