New York Attorney General Seeks Void Of Trump’s $175M Bond Over Collateral Concerns

New York Attorney General Letitia James requested that the judge void the $175 million bond posted by former President Donald Trump over her concerns that the company he used does not have enough identifiable collateral to secure the bond.

New York Attorney General Letitia James requested that Judge Arthur Engoron void the $175 million bond posted by former President Donald Trump over her concerns that the company he used does not have enough identifiable collateral to secure the bond. James also wants Engoron to pursue a larger monetary damage award while Trump appeals a $454 million verdict against him in the civil business fraud case.

As CNBC reports, the request from lawyers representing James’s office notes in their filing that Knight Specialty Insurance Company (KSIC), the company Trump used to procure the bond, is “a small insurer that is not authorized to write business in New York and thus not regulated by the state’s insurance department, had never before written a surety bond in New York or in the prior two years in any other jurisdiction, and has a total policyholder surplus of just $138 million.”

According to a court filing, KSIC’s surplus of $138 million is less than the reduced bond amount of $175 million, which according to an op-ed written by Ellie Quinlan Houghtaling for The New Republic, means that the company would have to spend 127% of its reserves, which is far beyond the 10% allotted by New York law.

As United Press International reports, James’ office was critical of Trump’s control of $175 million in cash he placed into an account as collateral, they said in a statement that the defendants “failed to meet their burden to demonstrate that the bond is ‘sufficiently collateralized by identifiable assets.’”

James’ office continued, “KSIC does not now have an exclusive right to control the account and will not obtain such control unless and until it exercises a right to do so on two days’ notice.”

The lawyers are also requesting Judge Engoron have Trump and other defendants put up a replacement bond within a week of his ruling on the matter, a bond dispute hearing is set for April 22. In February, Engoron found Trump and the other defendants guilty of fraud, determining that the group of defendants, including the Trump Organization, had inflated the value of various real estate assets with the goal of boosting Trump’s net worth. The $454 million that Trump has been required to pay by Judge Engoron is getting larger, as interest accrues on the amount each day it goes unpaid.

As MSNBC reports, KSIC is part of the Hankey Group of Companies, run by Los Angeles-based billionaire Don Hankey. Several of Hankey’s companies have also run afoul of federal regulators in the past, and Hankey, a Trump supporter, has maintained that he is not regretful of his company’s decision to post Trump’s bond.

Despite this, Hankey told Reuters in an interview, “We thought it would be an easy procedure that wouldn’t involve other legal problems and it’s not turning out that way. We probably didn’t charge enough. We have been getting a lot of emails, a lot of phone calls. Maybe that’s part of the reason he had trouble with other insurance companies.”