UPDATED 2:20 P.M.
NEW YORK (Reuters) -Former President Donald Trump agreed on Monday to additional restrictions on the $175 million bond in the former U.S. president’s New York civil fraud case, resolving concerns by the state attorney general that the funds were not secure.
The bond issued by Knight Specialty Insurance is meant to secure Trump’s compliance with a $454.2 million judgment won by state Attorney General Letitia James if he does not succeed in an appeal.
Justice Arthur Engoron imposed the penalty after finding that Trump, the Republican presidential candidate to face President Joe Biden in the Nov. 5 election, fraudulently inflated his net worth and real estate assets to deceive banks and insurers into providing better terms.
James, a Democrat, had challenged the bond this month, saying Trump still had access to the Charles Schwab account pledged to the insurer as collateral.
But at a hearing on Monday, down the block from where jurors heard opening arguments in Trump’s criminal hush money trial, lawyers for Trump and Knight agreed that the funds would remain as cash and not be traded for securities.
They also agreed that Knight would have exclusive control of the account and not withdraw funds, and to provide James with monthly statements to assure that the cash isn’t going anywhere.
The agreement was reached after Engoron questioned the security of the collateral.
“You keep using the word agreement, what if they break the agreement?” he asked Trump’s lawyer Christopher Kise. “It all seems like a house of cards.”
Knight is owned by billionaire Trump supporter Don Hankey.
Earlier on Monday, Trump defended the bond outside the courtroom at the criminal trial.
“We put up cash and the number is 175,” Trump said. “She shouldn’t be complaining about the bonding company. The bonding company would be good for it because I put up the money. I have plenty of money to put up.”
James had argued in court papers that a Trump-owned trust still controlled the account, and Knight’s own financial arrangements appear insufficient to cover the bond.
Hankey previously said in an interview that he charged Trump a low fee as he did not anticipate problems.
“We thought it would be an easy procedure that wouldn’t involve other legal problems and it’s not turning out that way,” he said. “We probably didn’t charge enough.”
Hankey made his fortune in subprime car loans, with some regulators criticizing his companies’ debt collection tactics. He is worth $7.4 billion, according to Forbes magazine.
Trump was originally required to obtain a guarantee for the entire verdict while he appeals, but a state appeals court let him post a smaller bond.
With much attention now focused on Trump’s criminal trial, Engoron noticed the relative paucity of courtroom attendees compared with when he oversaw the civil fraud trial.
“Where is everyone?” he joked at the beginning of the hearing.
(Reporting by Jody Godoy in New York; Additional reporting by Andy Sullivan in Washington, Editing by Nick Zieminski, Bill Berkrot and Alistair Bell)
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NEW YORK (Reuters) – The insurer that provided Donald Trump a $175 million bond in his New York civil fraud case will try to convince a state judge on Monday that it is qualified and financially strong enough to issue the guarantee.
The bond issued by Knight Specialty Insurance Co is meant to secure Trump’s compliance with a $454.2 million judgment won by state Attorney General Letitia James if he does not succeed in an appeal.
Justice Arthur Engoron imposed the penalty after finding that Trump, the Republican presidential candidate, fraudulently inflated his net worth and real estate assets to deceive banks and insurers into providing better terms.
James, a Democrat, challenged the bond this month, saying Knight lacked a “certificate of qualification.” The state attorney general filed court papers on Friday questioning whether the bond is backed by secure assets.
Knight is owned by billionaire Trump supporter Don Hankey.
Engoron will consider James’ objection at a civil court hearing in Manhattan, at the same time jurors down the street are expected to hear opening arguments in Trump’s criminal hush money trial.
Knight has said it was authorized to issue the bond, which is fully backed by cash held in a Charles Schwab account pledged to the insurer, and that it could access nearly $2.2 billion of assets at its parent company if something went wrong.
James said in court papers that a Trump-owned trust still controls the account, and that Knight’s own financial arrangements appear insufficient to cover the amount of the bond.
Hankey previously said in an interview that he charged Trump a low fee as he did not anticipate problems.
“We thought it would be an easy procedure that wouldn’t involve other legal problems and it’s not turning out that way,” he said. “We probably didn’t charge enough.”
Hankey made his fortune in subprime car loans, with some regulators criticizing his companies’ debt collection tactics. He is worth $7.4 billion, according to Forbes magazine.
Trump was originally required to obtain a guarantee for the entire verdict while he appeals, but a state appeals court let him post a smaller bond.
(Reporting by Jody Godoy in New York; Editing by Nick Zieminski and Bill Berkrot)
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