Understanding the Implications if Trump Fails to Secure a $464 Million Bond

Donald Trump's legal team and the New York Attorney General's office are both putting in a lot of effort before the upcoming deadline on Monday. They are working to secure a bond for the civil fraud judgment against the former president, which amounts to millions of dollars.

The judgment made by Judge Arthur Engoron in February has left Trump personally owing over $454 million. This amount increases to $463.9 million when taking into account the money owed by his sons, Eric and Donald Jr., the Trump Organization, and the interest that has accrued since the ruling.

Former President Donald Trump is seen at a gala dinner in Columbia, South Carolina, on February 23, 2024.

Former President Donald Trump is seen at a gala dinner in Columbia, South Carolina, on February 23, 2024.

Alyssa Pointer/Reuters

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Experts interviewed by CNN believe that if former President Trump fails to obtain the required bonds for his appeal, Attorney General Letitia James and her team are ready to navigate the legal process of seizing his assets following Judge Engoron's ruling.

Assets like buildings, houses, cars, helicopters, and his plane are at stake. The primary attention may be on his bank accounts, which experts believe will be easier to seize, and properties, which would be more challenging.

Trump has requested a state appeals court to permit him to post a lower bond - or even no bond at all - arguing that he would suffer irreversible damage if he had to sell properties at a discounted price that cannot be reversed if he wins his appeal. The court has not made a decision yet.

Here’s what happens if Trump can’t secure the bond:

Seizing bank accounts and cash

In theory, officials can start the complex legal process of seizing his assets, as long as state prosecutors and Trump's legal team do not intervene. They will need to decide which assets to target, such as his bank accounts or properties. Many experts believe that the initial step should be freezing his bank accounts.

According to Peter Katz, a former federal prosecutor with experience in fraud cases, seizing the bank accounts is the easier part of the process. Once the Attorney General issues a court order, the banks will comply and transfer the funds to the Attorney General's accounts. Dealing with other assets, like properties, may present more challenges.

The Truth Social website is seen on a smartphone arranged in New York on March 22, 2024.

The Truth Social website is seen on a smartphone arranged in New York on March 22, 2024.

Gabby Jones/Bloomberg/Getty Images

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Truth Social not only made Trump wealthier but also provided him with a new platform to communicate. However, the social media site is currently facing challenges.

To access funds from Trump's accounts, state prosecutors need to request assistance from the New York City Sheriff or a US Marshall. They must enter the main branch of the bank where Trump holds his money, armed with a court order.

Adam Pollock, a former assistant New York State Attorney General who now specializes in judgment enforcement at Pollock Cohen LLP, explained that individuals typically hand the judgment to the manager. The manager is then expected to promptly pay the full amount with a cashier's check. Any delay from the attorney general's office may simply be due to strategizing the best approach.

Attorney Alden B. Smith, who specializes in debt collection, explained that people are working on organizing their assets, aiming to locate the most easily accessible ones. According to Smith, a bank account is the quickest and most efficient option for this purpose. He added, "They're likely just figuring out the best approach."

When it comes to buildings and businesses, what should be considered?

Seizing property is a lengthy process. State prosecutors first determine which property they want to take. They then provide the sheriff's office with an execution order and a $350 fee, as explained by Pollock. The sheriff posts a notice for the property in three locations, and the Attorney General's office advertises it four times, according to Pollack. Finally, after 63 days from when the execution order is given to the sheriff, a public auction is held for the property.

Pollock mentioned that one option could be to transfer ownership of 500 corporations and LLCs to the sheriff for public auction to meet the judgment of $455 million.

State prosecutors have taken legal steps in New York to start the seizure process for Trump's out-of-state properties, which may present more challenges.

The attorney general's office filed judgments in Westchester County, north of New York City. This move is seen as the initial step towards potentially seizing the former president's golf course in Briarcliff Manor and his private estate known as Seven Springs.

State lawyers officially entered the judgments with the clerk's office in Westchester County on March 6. This action came shortly after Engoron's ruling, indicating a swift progression in the legal process.

What's the deal with Mar-a-Lago?

There haven't been any other legal actions taken yet, but there is a possibility of similar processes happening in other states where Trump owns properties. One of the most notable ones is Mar-a-Lago in Florida, although other properties may be easier to deal with.

The attorney general's office in New York State is the biggest firm, if you view it as a law firm. They have no lawyers in Florida. According to Pollack, any legal actions related to properties would likely happen in New York before Florida.

A significant legal issue may arise regarding how much of Mar-a-Lago is classified as Trump's residence, which could impact its protection under the law.

“At the heart could be the homestead extension. But that would have to play out in court,” Pollock said.

Can Trump get out of this?

Trump is currently waiting for a decision from an appeals court. This decision will determine if he has to pay less money or if the judgment will be put on hold while his appeal is reviewed.

If Trump's appeal is not successful, he may have to consider filing for bankruptcy. This is not a choice he prefers, but it is still an option for him.

Smith explained that if Trump files for bankruptcy, the debt will be discharged and the judgment will be automatically stayed. Bankruptcy is a significant obstacle for lawyers trying to collect debts. If Trump doesn't come up with the money, his options become limited.

Smith suggested that the only options for stopping the process without bankruptcy or a bond would be limited.

One potential solution for Trump and his team could involve selling off smaller properties to help pay down the debt.

Harry Litman, a former deputy assistant attorney general, told CNN on Friday that he will do anything before letting Tish James put a metaphorical padlock on 40 Wall Street.

As the clock is about to run out, some experts are questioning why a grace period was even given.

Pollock pointed out that there is no need for courtesy towards someone who owes $455 million to the people of New York due to being repeatedly found guilty of fraud. According to Pollock, extending courtesy to such an individual is not typical.

The question remains: Does Trump have the money to pay off his debts?

The former president shared on Truth Social that he currently has nearly $500 million in cash that he planned to use for his campaign. He mentioned that James is attempting to take this money away from him.

"Through hard work, talent, and luck, I currently have almost five hundred million dollars in cash, a significant portion of which I intended to use in my campaign for president," Trump wrote in all caps on Truth Social. He expressed frustration towards a judge in a case with the attorney general, where he believes he has done nothing wrong but feels that the judge wants to take his money.

His lawyer, Chris Kise, clarified to CNN that when Trump mentioned money, he wasn't talking about cash in hand. Kise explained that Trump was actually referring to the funds disclosed in his campaign forms, which he accumulated over the years from his thriving businesses. This is the same money that Letitia James and the Democrats are focusing on.

Trump recently had to secure a nearly $92 million bond to satisfy the judgment against him in the E. Jean Carroll defamation case as he appeals.

Litman informed CNN that there is likely less money than Trump claims due to the fraud ruling. Nevertheless, he added, this is a significant setback for the former president.

Litman believes that if a company suddenly loses all its assets like chairs, furniture, and accounts receivable, it would be the end of the road for the Trump organization in New York. He describes it as a very dire situation for Trump, even if it is only partially true.

Editor's P/S:

The impending legal battle over Donald Trump's civil fraud judgment highlights the complexities of financial accountability for public figures. The article provides a comprehensive overview of the legal proceedings, potential asset seizures, and the implications for Trump's wealth. It emphasizes the gravity of the situation, as Trump faces the prospect of losing significant assets, including properties, bank accounts, and businesses.

The article also raises questions about the fairness of the process and the potential impact on Trump's political aspirations. Trump's claims of having substantial cash reserves, while disputed by his lawyer, suggest that he may have the financial means to satisfy the judgment. However, experts caution that the seizure process could be protracted and challenging, especially considering the value and complexity of Trump's assets. As the deadline approaches, it remains to be seen how this legal saga will unfold and what its ultimate consequences will be for Trump and his business empire.