The ability of the surety company responsible for the $175 million bond of former President Donald Trump is being questioned by New York Attorney General Letitia James.
On April 1, Trump submitted the $175 million bond to prevent James from seizing his assets, following an appeals court decision that allowed him to post the bond amount to cover a civil fraud judgment of $464 million. The appeals court ruling ensured that Trump could appeal the judgment.
The bond was underwritten by Knight Specialty Insurance Company, which essentially made a promise to cover the $175 million bond if Trump’s appeal is unsuccessful and he fails to make the payment. Trump paid a fee to Knight Specialty Insurance Company and provided cash as collateral in order to obtain their coverage.
According to a court filing on Thursday, James has raised doubts about the company’s capacity to pay the bond amount. Judge Arthur Engoron, who presided over Trump’s civil judgment, has tentatively set a hearing for April 22 to address James’ concerns.
The NYT reports:
“In a court filing on Thursday, Ms. James noted that Knight was not registered to issue appeal bonds in New York, and so she demanded that the company or Mr. Trump’s lawyers file paperwork to “justify” the bond within 10 days. Ms. James is seeking to clarify whether Knight, which had never posted a similar court bond before aiding Mr. Trump, is financially capable of fulfilling its obligation to pay the $175 million if Mr. Trump defaults.
“Even if Knight lacks the funds itself, the company should be able to tap the collateral Mr. Trump pledged.
“In a statement on Thursday, a lawyer for Mr. Trump, Christopher M. Kise, slammed Ms. James, calling her case a “baseless and vindictive political crusade” and her objections to the bond an effort “to stir up some equally baseless public quarrel in a desperate effort to regain relevance.”’
In February, Judge Engoron imposed a hefty penalty of over $350 million on Trump and the Trump Organization, while also prohibiting him from holding any position as an officer or director in a New York corporation for a duration of three years. James aimed to financially cripple Trump by subjecting him to a staggering $464 million fine and a permanent exclusion from the real estate sector within the state of New York.