Economy 29-02-2024 01:01 16 Views

Judge won’t delay Trump financial penalty but lets sons temporarily remain atop company

NEW YORK — A New York judge on Wednesday rejected a request from former president Donald Trump to delay enforcement of a judgment totaling at least $450 million while he appeals that order. But he did allow Trump’s adult sons to remain in leadership positions atop the Trump Organization for the time being.

The decision followed a separate judge’s decision this month that hit Trump with mammoth fines and also blocked him and his sons Donald Trump Jr. and Eric Trump from holding top jobs in New York corporations. That judge, New York Supreme Court Justice Arthur Engoron, concluded after a civil fraud trial that Trump and others had given false data to financial institutions so they could borrow money at lower rates, and he ordered Trump to pay the hefty financial penalties.

Trump on Wednesday asked an appeals court judge to stay that judgment, and his attorneys offered to post a $100 million bond rather than a fuller bond amount that they suggested could top $500 million. His attorneys also suggested that if a stay was not granted, it was possible the defendants would be forced to sell properties.

Associate Justice Anil C. Singh in the New York State Supreme Court’s Appellate Division, who heard arguments in the matter Wednesday afternoon, rejected attempts to delay the judgment. Singh did not directly address the request to allow Trump to post the $100 million amount. But his decision declined to delay “the enforcement of monetary judgment,” which appears to mean Trump still has to post the full amount.

But in a potentially significant detail, Singh did grant a temporary stay of Engoron’s directive blocking Trump and his company from seeking loans from financial institutions in New York for three years, which Trump’s attorneys suggested was a hindrance to posting the full bond.

The moves on Wednesday came only from Singh, and they could be altered or undone in the coming weeks. A full panel is expected to review the case and issue a decision on March 18.

In requesting the delay earlier in the day, attorneys for Trump and the other defendants had assailed what they called Engoron’s “unprecedented and punitive” punishment. They said Engoron imposed a “facially absurd” financial penalty as part of “a zealous quest to inflict untoward punishment” in the case.

During a hearing discussing the stay request, Christopher Kise, an attorney for Trump, said handing over that sizable amount of cash would be a hurdle for even the country’s wealthiest residents.

“No one, including Jeff Bezos, Elon Musk and Donald Trump, has five hundred million laying around,” Kise said. (Bezos owns The Washington Post.)

The case had originated with a lawsuit filed by New York Attorney General Letitia James (D), who accused Trump and other defendants — including his adult sons and the Trump Organization, the family company — of committing a years-long financial fraud. Engoron heard the case without a jury, then released his decision on Feb. 16. He ordered Trump to pay more than $354 million in penalties, plus interest — putting the amount at more than $450 million.

James’s office pushed back on the request, writing that there was “no merit” to the suggestion that posting a portion of the judgment would be sufficient. Instead, her office wrote, there was “substantial risk that defendants will attempt to evade enforcement of the judgment (or make enforcement more difficult) following appeal.”

During the hearing, Dennis Fan, an attorney speaking for James’s office, depicted Trump’s side as trying to wiggle out of giving up control of assets without saying they could not afford the full bond.

“I think if you read between the lines, what they’re saying is we don’t want to put up the collateral,” Fan said.

In addition to the financial penalties, Engoron had also issued other punishments, including blocking Trump from a top job with a New York corporation for three years and banning his adult sons from similar roles for two years each.

Attorneys for the defendants said Wednesday in their court filings that Engoron’s “draconian” punishments exceed his available authority and would impede “a global real estate empire in the conduct of lawful business.” And they said these punishments would force the company “to operate without leadership until this appeal is resolved.”

But the mammoth financial penalty in the case drew the widest notice. Engoron’s decision, coupled with a separate $83.3 million judgment Trump also faces after an unrelated defamation case, means he could have a significant cash crunch.

Legal experts say that to keep the judgments from being enforced amid appeals, Trump must put up the entire amount in cash or bonds. Much of Trump’s wealth is entwined with real estate, so it remains unclear how much cash he has available or how he could put up the money.

Engoron wrote in his decision that the defendants’ “complete lack of contrition and remorse borders on pathological.” Attorneys for the defendants responded Wednesday by writing that they were punished severely because they “did not grovel and apologize” at trial.

The attorneys wrote that they planned to “secure and post a bond in the amount of $100 million.” An appeal bond, they wrote, would include the amount of the judgment, along with costs and interests during the appeal process, which could push the bond amount to more than $550 million. They highlighted the blockade on loans as a hurdle to posting the bond.

“The exorbitant and punitive amount of the Judgment coupled with an unlawful and unconstitutional blanket prohibition on lending transactions would make it impossible to secure and post a complete bond,” the attorneys said.

The attorneys also raised the prospect of having to sell off properties if the stay was not granted as requested. Without such a stay, they wrote, “properties would likely need to be sold to raise capital under exigent circumstances.” Then, they wrote, even if the appeal succeeds, there would be no way to regain control of those properties or “recover the resulting financial losses.”

Also on Wednesday, a letter containing a powder was sent to Engoron’s courthouse. A person with knowledge of the situation said that preliminary tests on the powder to see if it contained hazardous substances were negative. A day earlier, James’s office also received an envelope containing white powder, which also tested negative.

Jonathan O’Connell contributed to this report. Berman reported from Washington.

This post appeared first on The Washington Post
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