Civil fraud ruling could be a 'financially devastating nightmare' for Trump: experts
Although it remains to be seen what will happen in the four criminal indictments that Donald Trump is facing, the 2024 GOP presidential frontrunner has been dealt some major blows in civil cases.
Jurors recently awarded writer E. Jean Carroll $83.3 million in damages in her second of two civil defamation lawsuits against Trump, which follows the $5 million a different jury awarded her in the first one. Now, Trump is awaiting a decision from Justice Arthur Engoron in New York State Attorney General Letitia James' civil fraud case; James is asking for $370 million.
In a report published on February 7, the Daily Beast's Jose Pagliery lays out some reasons why Engoron's ruling could be financially devastating for Trump.
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"Whatever the enormous judgment will be," Pagliery explains, "the state-mandated 9 percent interest rate on the sum is likely to date back to the start of AG Letitia James' investigation in 2018, which means Trump could be in the hole for nine-figures more. If the judgment against Trump is, for instance, $370 million, he would face an additional $33.3 million tacked on annually to the base amount of the original judgment. It's simple interest, which means it only applies to the original judgment."
The Daily Beast reporter continues, "But if the time period stretches back six years, Trump would automatically owe 54 percent more than whatever the judgment comes out to be. In this hypothetical of $370 million with six years of interest, it'd be almost exactly $200 million more. If the judgment is that high, it would be financially devastating to Trump, even with buildings he claims are worth billions."
Pagliery notes that if Trump appeals Engoron's ruling — whatever it turns out to be — the process could be difficult and costly.
"According to New York State court rules, Trump will have only a month to front a massive appellate bond worth anywhere from 110 percent to 120 percent of the judgment," the journalist reports. "Experts who spoke to The Daily Beast said Trump has two options: pay it directly to the court system, or find a surety company that would provide the state a guarantee on his behalf. For Trump, either situation is a nightmare."
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Jurisco CEO N. Alex Hanley notes that Trump could have difficulty finding companies that want to help the Trump Organization out.
Hanley told the Beast, "In a divisive case like this, lots of companies would decline to be involved in it. The death threats, the pitchforks — I've had that happen in many cases that aren't nearly as high-profile."
Queens-based criminal defense attorney Evans D. Prieston told the Beast, "Is he even allowed to use his assets to secure the bond? Because the corporation could be defunct. What if the court says you have to sell everything? The court can denude him of his assets…. and those assets are the very thing he'd need as collateral."
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Read The Daily Beast's full report at this link (subscription required).
