Lawyers for Donald Trump and New York Attorney General Letitia James have hashed out a compromise on the $175 million bond in the former president’s civil fraud case.
James’ office last week sought to void the bond, posted by Knight Specialty Insurance Company, questioning whether Trump would improperly still have control of the $175 million cash collateral his lawyers say he placed in a money market account.
Her office also questioned whether the company could handle the full amount if Trump defaulted, based on its financial statements and its dealings in the Cayman Islands.
The parties made the agreement in Manhattan Civil Supreme Court, down the block from where Trump is being tried in his historic criminal hush money trial. Judge Arthur Engoron, who presided over the bond hearing, joked, “Where is everyone?” as he looked at a relatively sparse audience of about a dozen reporters.
Trump lawyer Chris Kise agreed to a list of restrictions meant to lock down that account so that the funds remain cash and can’t be swapped with less secure assets. Knight Specialty will keep exclusive control over the account and won’t be permitted to withdraw or trade any of the funds.
A New York appeals court last month allowed Trump to post a bond of $175 million rather than the full amount of his $454 million civil fraud penalty to ward off foreclosures while he fights the outcome of his civil fraud case.
Engoron questioned the earlier proposal to keep the collateral in a Charles Schwab account controlled by the DJT Revocable Trust, with an agreement that the money not be withdrawn.
“You keep using the word agreement. What if you break the agreement?” Engoron asked. “We’re not trying to rely on agreements. We’re trying to rely on money…. It all seems like a bit of a house of cards.”
Kise responded, “So every bond is a house of cards… your hypothetical is calling into question the veracity of one of the largest institutions in the world.”
“There’s no trick. There’s no games. There’s no trap door,” Kise added. “There’s $175 million that’s been put into a bank account. It’s there.”
Andrew Amer, a lawyer for James’ office, argued that money could be swapped for something less secure, like a mutual fund, as long as Knight Specialty consents by remaining quiet about it.
“It needs to be a true lockbox,” Amer argued.
Amer laid out a list of restrictions, including providing the courts with monthly bank statements from the Schwab account.
Trump owes most of the $454 million judgment handed down by Engoron, with his former executives, Allen Weisselberg, Jeffrey McConney, and sons Eric and Don Jr. on the hook for the remainder. Engoron found them liable for multiple fraud claims in James’ September 2022 lawsuit for habitually inflating Trump’s net worth in business deals for years by as high as $3.6 billion annually.
Trump is also barred from running a New York business for three years while his sons are prohibited for two years.
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