New York Attorney General Letitia James has urged a judge to cancel the $175 million bond secured by former President Trump to delay payment of a larger monetary award in his civil fraud lawsuit.
According to Fox News, in court filings on Friday, state attorneys argued that Trump and his co-defendants, including the Trump Organization and his sons, failed to prove the legitimacy of the surety used to obtain the bond. They also questioned the adequacy of the collateral backing the bond.
“The People respectfully request that the Court deny Movants’ motion to justify the surety, declare the Bond to be without effect, and order that any replacement bond be posted within seven days,” wrote lawyers from James’s office.
Trump’s bond was obtained through Knight Specialty Insurance Company based in California.
State attorneys highlighted the company’s limited financial capacity, noting that it had never before issued a surety bond in New York and had a relatively small policyholder surplus.
According to state law, insurance companies like Knight cannot expose themselves to liabilities greater than 10 percent of their surplus. Given Knight’s surplus of $138 million, the $175 million bond exceeds this limit by $161.2 million.
Furthermore, the state argued that because Trump still has access to the $175 million cash collateral, the bond lacks sufficient collateralization.
Judge Arthur Engoron previously ruled in the civil fraud case that Trump and his associates conspired to manipulate Trump’s net worth for tax and insurance advantages, resulting in a judgment of $464 million plus interest. Trump’s bond prevents the enforcement of this judgment while the defendants appeal, and it also delays other penalties.
A hearing is scheduled for Monday to address the attorney general’s concerns, coinciding with the commencement of Trump’s criminal trial in New York.
