Today ends the grace period for Donald Trump to post $464 million bail, a crucial moment that could mark the start of a new battle with Letitia James, New York’s attorney general. If the payment is not made, Trump risks a seizure of his assets, which means that the legal confrontation between the former president and the state of New York will enter an intensified phase.
Today marks the end of a 30-day period of mercy that James granted to Trump after the New York court handed down its verdict. The American ex-president has filed an appeal with a state court, which has not yet made a decision. Although in theory this seems to be a clear legal issue, in practice, as usual in the confrontations between these two parties, brings political complications. We list them here.
What happens if Trump doesn’t pay?
If Trump doesn’t pay, James could issue an execution order to the Manhattan sheriff or one of several authorized New York marshals to collect money on behalf of the courts. If she requests the seizure of Trump’s bank assets, the sheriffs or marshals can immediately start collecting the amount.
Seizing real estate is more complicated. Trump’s buildings are often owned by limited liability companies. Although he controls them, he may argue that he cannot independently transfer the assets, meaning the attorney general would need a court order to force him to do so. Even then, New York law requires that the sale of the properties must be advertised in local newspapers and public places at least 56 days before the auction. The properties are typically auctioned off in front of the steps of the county courthouse.
The process is slightly different in Florida, but nothing prevents James from seizing, for example, Mar-a-Lago or other Trump properties in different states.
The attorney general can also more easily seize items in Trump’s properties, such as works of art. While Trump may argue, the judge in the case would “issue a reversal order in a heartbeat,” said Adam Pollock, a New York attorney with previous experience in the attorney general’s office. However, Trump is allowed to keep certain items, such as “one motor vehicle with a value not to exceed $4,000” and any Bibles he owns.
Does the Attorney General have any other options?
Some analysts say moving too quickly by Letitia James, a Democrat, could backfire. “It’s a delicate balance,” notes Nikos Passas, a law professor at Northeastern University. The Attorney General must apply the law impartially. “At the same time, you don’t want to give the impression of being dishonest or acting out of political revenge.”
James can freeze Trump’s assets by giving him one restraining order or issue an injunction prohibiting him from making “any sale, assignment, transfer of, or interference with any property in which he has an interest.” If violated, he would show contempt of court.
Another possibility is that James requests financial information from Trump, forcing him to reveal all debts and encumbrances against his assets. That could be painful for the former president, given that many of his properties are encumbered with mortgages. Trump, who has built his image on his billionaire status, may turn out to be less wealthy than he claims.
James could also buy Trump more time by granting him an extension. But that only seems likely if his lawyers can prove he is close to obtaining the necessary bail and just needs a little more time, according to experts.
What would a bail cost Trump?
A deposit acts as a kind of bank guarantee. It ensures that a suspect is able to pay a legal judgment if appeals are unsuccessful. Insurers often require collateral of 100 percent of the judgment amount or more, in cash or easily liquidated securities – not real estate.
In Trump’s case, his lawyers estimate he will actually have to collect $570 million in collateral, or 120 percent of the judgment. In addition, there is an initial fee of 1 to 3 percent charged by the guarantor. Trump’s team has estimated that at $18.5 million. Even if Trump were to win his appeal, he would not get that money back.
How much cash does Trump have?
Trump stated on social media that he has “almost $500 million in cash.” That comes after he posted a $91.6 million bond earlier this month for a separate judgment from a defamation case brought by writer E. Jean Carroll. Trump’s actual financial status is unknown as his business is private. His long history of exaggerating his wealth was already exposed in the New York fraud case.
What about Truth Social?
Trump could expect a potential financial windfall of $3 billion or more after shareholders approved a plan to take his social media company public through a special purpose acquisition vehicle (SPAC). But a lock-up agreement prevents him from selling his shares for six months. The actual value of the company at the IPO is still unknown. Many appear to have bought shares more out of admiration for Trump than based on business fundamentals.
“The value only exists on paper,” says Passas of Northeastern University. “Anyone who accepts that as collateral will have to assess the risk.”
One option for Trump could be to offer a combination of cash, stocks and other assets as collateral. Meanwhile, the attorney general suggested that a group of insurers could split the bond into, say, five $100 million instruments to limit their risk.
Can Trump get help from a wealthy friend or donor?
Although a wealthy Trump supporter could post the bond, that would attract significant public attention. It could also run afoul of campaign finance laws if the money is considered a contribution to help re-elect Trump.
“That would certainly raise serious questions as to why anyone would spend such an amount and take on all the other burdens that come with it,” said Erin Chlopak, a campaign finance expert at the Campaign Legal Center.
If it were a foreign source, the scrutiny would be even greater, and the campaign finance issues even more delicate. In terms of other campaign funds, Trump could tap Save America, the so-called leadership PAC he controls, which had just $4.1 million in cash at the end of February.
Can Trump file for bankruptcy?
That move could probably buy Trump some time. But his team appears to be avoiding that option because of the political damage it would do to someone who presents himself as a brilliant businessman.
As for the bail system in this situation, Donald Trump is appealing a fraud conviction and the court is requiring him to set up bail first. This deposit serves as a guarantee that the party appealing is able and willing to pay the judgment if the appeal is unsuccessful. This arrangement provides certainty for the winning party of the original lawsuit. Regardless of how long the appeals process takes, the money remains in escrow and can be awarded immediately if the appeals process goes in the plaintiff’s favor. This ensures that the winning party is not disadvantaged by delays or tactics designed to avoid payment of the judgment.
In Trump’s case, the $464 million bail requirement, potentially rising to $570 million with additional costs, illustrates the severity of the fraud conviction against him. The bond ensures that, regardless of the outcome of Trump’s appeal, damages are guaranteed to the plaintiff. That system underlines the responsibility of the appealing party to ensure that they have the means to meet their potential obligations, and provides a mechanism to maintain justice even in complex and protracted legal battles.
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