The New York attorney general has petitioned a judge to nullify a $175 million bond posted by Donald Trump, aimed at halting the enforcement of a half-billion dollar fraud judgment against him and his businesses. The attorney general, arguing that the bond lacks adequate collateral or backing from a properly licensed firm, presented this argument in a filing on Friday afternoon.
Letitia James’s office, responsible for the civil case revealing Trump’s significant overstatement of his real estate empire’s value, pointed out “vague, incomplete, and inconclusive evidence” regarding the cash reserves designated to ensure that the chosen surety would not default on the bond.
The attorney-general’s office recommended declaring the $175 million bond, guaranteed by Knight Specialty Insurance Company, as ineffective, proposing an additional week for Trump to secure an alternative supporter.
Failure to produce a valid bond could prompt James to initiate property seizures to meet the judgment. A hearing regarding this issue is slated for Monday.
Following Trump’s legal team’s assertion that securing a bond for the full judgment amount would be “impossible,” an appeals court reduced the bond to $175 million. Trump posted this reduced amount earlier in the month, with backing from Knight, a company among several owned by Los Angeles-based subprime auto loan billionaire Don Hankey. However, Knight lacks the necessary “certificate of qualification” for valid surety in New York.
In subsequent court filings, Knight asserted its standing as a “respected, well-capitalized insurer,” stating that the bond was supported by a Charles Schwab brokerage account held by the Donald J. Trump Revocable Trust, containing slightly over $175 million in cash.
Nevertheless, the attorney-general’s office expressed reservations, noting that only a single screenshot of the account balance was provided. James’s office further added that the Trust maintained ownership of the account and retained the ability to withdraw funds at any time.
The attorney-general’s legal team additionally asserted that Knight Insurance transferred “100 percent of its retained insurance risk to affiliates in the Cayman Islands,” exploiting “lax regulations” to inflate its surplus, thus creating a false sense of security. A representative for Knight did not promptly respond to a comment request.
Adam Pollock, a New York attorney formerly with the attorney-general’s office, remarked that the filing demonstrated James’s avoidance of “an overly aggressive stance,” portraying the request for a new bond as “a thoroughly reasonable proposal.”