The New York Attorney General’s office has petitioned a judge to invalidate the $175 million bond secured by former President Trump to delay payment of a larger monetary award in his civil fraud case.
According to court filings on Friday, state attorneys argued that Trump and his co-defendants, including the Trump Organization and his two eldest sons, failed to provide sufficient evidence that the surety backing the bond possesses the necessary funds. Additionally, they contend that the collateral supporting the bond is not adequately secure and identifiable.
In a 26-page filing, lawyers from New York Attorney General Letitia James’s office requested the court to reject the defendants’ motion justifying the surety, declare the bond null, and mandate the posting of a replacement bond within seven days. They also seek any further relief deemed appropriate by the court.
Trump’s bond was secured by Knight Specialty Insurance Company based in California. However, state attorneys pointed out that Knight is a relatively small insurer unauthorized to conduct business in New York and had never previously issued a surety bond in the state. They highlighted Knight’s limited policyholder surplus of $138 million, which under New York law, prohibits the exposure to liabilities exceeding 10 percent of the surplus.
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Given that Trump retains access to the $175 million cash collateral, the state argues that the defendants failed to demonstrate adequate collateralization of the bond with identifiable assets.
Earlier this year, Judge Arthur Engoron ruled that Trump, the Trump Organization, and top executives conspired to manipulate Trump’s net worth for tax and insurance purposes, resulting in a combined $464 million judgment plus interest.
Trump’s bond prevents the enforcement of the multimillion-dollar judgment during the appeals process and halts other penalties. Originally set at the full judgment amount, the bond was reduced after Trump’s lawyers claimed it was unattainable for him to secure.
The judge is scheduled to conduct a hearing on Monday to address the concerns raised by the attorney general’s office, coinciding with the commencement of Trump’s New York criminal trial.
