(Adds request for comment to Trump’s lawyers, background on case)
By Jonathan Stempel and Luc Cohen
NEW YORK, Feb 28 (Reuters) –
Donald Trump on Wednesday lost a bid to pause a $454.2 million civil fraud judgment against him for overstating his net worth and real estate values to dupe lenders while he appeals, meaning he must soon post assets with the court to prevent authorities from seizing his property.
The decision by Associate Justice Anil Singh of the New York Appellate Division must still be affirmed by a full panel of the mid-level state appeals court. Singh nonetheless granted Trump’s request for a stay of a portion of the decision barring him from running any New York corporation or applying from loans from the state’s banks for three years.
Trump’s lawyers did not immediately respond to a request for comment on Singh’s decision.
In asking for the stay earlier on Wednesday, Trump’s lawyers said he is unable to post a bond for the full amount of the judgment while he appeals and wants instead to secure a $100 million bond. A bonding company would be on the hook for any payout if Trump loses his appeal and proves unable to pay.
Trump is appealing a Feb. 16 decision by Justice Arthur Engoron of the state court in Manhattan that also includes a three-year ban from serving in a top role at any New York company or seeking loans from banks registered in the state.
Trump is the frontrunner for the Republican nomination to challenge Democratic President Joe Biden in the Nov. 5 U.S. election.
James sued Trump, the Trump Organization and other defendants in 2022, accusing them of overstating the value of Trump’s properties to inflate his net worth and obtain better loan and insurance terms.
In their filing with the Appellate Division, Trump’s lawyers said a stay of Engoron’s decision was needed because Trump would suffer “irreparable harm” if James were free to sell his real estate assets to raise capital to pay the judgment.
Story continues
The lawyers also said the “exorbitant and punitive amount of the judgment coupled with an unlawful and unconstitutional blanket prohibition on lending transactions would make it impossible to secure and post a complete bond.”
They said a $100 million bond, together with Trump’s “vast” real estate holdings and ongoing oversight by the court-designated monitor for the Trump Organization, would be more than sufficient to secure the judgment.
In a separate filing, James opposed a stay, calling it “especially inappropriate” given the defendants “all but concede” that Trump does not have enough liquid assets to satisfy the judgment.
“These are precisely the circumstances for which a full bond or deposit is necessary, where defendants’ approach would leave (the attorney general’s office) with substantial shortfalls once this court affirms the judgment,” James wrote.
RISK OF EVASION
James also said there was “substantial risk” that Trump might not pay up, or might move assets beyond her reach, if he lost his appeal.
She cited the defendants’ having “surreptitiously” concealed from the monitor a $40 million transfer, and Trump’s recent announcement that some of his businesses had moved to Florida.
Trump has estimated his net worth in the billions of dollars, but much of that is in real estate, not cash.
Engoron imposed a $354.9 million penalty against Trump, plus daily interest that began to accrue in 2019.
The payout had grown to $454.2 million with interest by Feb. 22, and additional interest is tacked on each day.
Trump is also seeking to avoid posting a full bond during an expected appeal of last month’s $83.3 million defamation verdict in favor of the writer E. Jean Carroll.
He has asked the judge in that case to let him appeal without posting any security, or alternatively by posting at most a $24.5 million unsecured bond.
(Reporting by Jonathan Stempel and Luc Cohen in New York; Additional reporting by Jack Queen; Editing by Will Dunham, Jonathan Oatis, Daniel Wallis and Noeleen Walder)