Letitia James issues 10-day ultimatum to company that guaranteed Trump’s $175M bond

04 April 2024

Former President Donald Trump narrowly avoided having his assets seized by New York Attorney General Letitia James last month after posting a $175 million bond at the last minute. But now, James is demanding clarity from the company that guaranteed it.

Axios reported Thursday that James' office recently filed a motion to compel either Trump's lawyers or the Knight Specialty Insurance Company (KSIC) to prove that it is financially able to comply with the conditions of the bond. Her motion gives both entities a 10-day deadline to "justify the surety" of the bond, or prove it can actually pay the bond amount. It remains unclear what actions James would take after the 10-day deadline. Presumably she could demand the court revoke the previous agreement and demand the full $464 million bond.

According to CBS News, KSIC is not registered with the state's Department of Financial Services, and the bond paperwork notably did not include a power of attorney authorization for the bond provider, nor did it include a financial statement from KSIC showing it was capable of shouldering the $175 million burden.

"In all the years I've been doing this, you always have to have a certificate from the Department of Financial Services saying that you're licensed to issue a surety bond," attorney Bruce Lederman, who has experience filing bonds in the Empire State, told CBS.

The chairman of KSIC is Don Hankey, who is a billionaire Trump supporter involved in the subprime auto loan industry. the New Republic reported this week that Hankey "carved out his $7.4 billion fortune" through "predatory practices, targeting low-income customers with high-interest auto loans." And the New York bond is not the first time Hankey has used his wealth on the former president's behalf.

"Hankey is also believed to be the largest shareholder in Axos Financial, according to MSNBC’s Lisa Rubin — a financial institution that, in 2022, refinanced more than $50 million of Trump's loans on Trump Tower and Trump National Doral Miami, according to documents filed with the Office of Government Ethics," the New Republic's Ellie Quinlan Houghtaling wrote.

A New York appeals court reduced the bond Trump had to pay to appeal his civil fraud judgment from $464 million to $175 million in late March. by paying the bond, the former president was able to avoid James seizing his bank accounts and real estate assets to satisfy the judgment. Even though the bond amount itself was lowered, Trump will still have to pay the full judgment amount of more than $450 million should he lose his appeal.

Aside from the civil fraud judgment bond, Trump also had to put up a $91 million bond to appeal his loss in writer E. Jean Carroll's defamation suit. That's on top of his appeal of a separate $5 million judgment in Carroll's favor after Trump was found liable for sexual abuse in 2023.

Trump's financial woes come as he is attempting to raise money to be competitive with President Joe Biden and the Democratic National Committee in the 2024 election cycle, who are so far trouncing him in fundraising numbers. However, Trump is due to raise more than $40 million at an upcoming fundraiser this weekend at Mar-a-Lago, in which billionaire hedge fund magnate John Paulson is corralling ultra-high net worth donors to write six-figure checks to Trump's campaign.

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