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Donald Trump loves the musical Cats, and like the titular creatures, the former president seems to have nine lives. Today, in the face of yet another near-death financial experience, Trump got his latest reprieve. An appeals-court panel in New York State reduced the bond he must post in a civil fraud case from more than $464 million to just $175 million.
Given that the past few months have seen Trump repeatedly use legal procedures to his advantage, drawing out the cases against him in the hope of eventually escaping them, this decision may look like yet another infuriating case of Trump extracting injustice from the justice system. But in fact it is not such an instance, and the reduction is actually quite appropriate.
Recall the timeline. In mid-February, Justice Arthur Engoron ruled that Trump must pay more than $350 million, plus interest, after he, his sons, and the Trump Organization engaged, according to the judge’s findings, in a years-long pattern of fraud, inflating and deflating the reported value of his assets in order to profit long-term. Trump promptly appealed the ruling, but as a defendant, he must post the value of his judgment while appealing.
The problem for Trump is that $350 million (which interest soon brought to nearly half a billion dollars) is a huge amount, even for him. He claims to have a net worth in the billions, but that number includes a great deal of assets that aren’t really available. Part of it is nebulous brand value, but a lot is in real estate—value that can’t be quickly accessed. Trump claimed in a deposition in the case that he had more than $400 million in cash and growing. That’s questionable and, even if true, wouldn’t leave him enough to cover the bond.
Instead, he sought to obtain a bond from a company that specializes in such products. Bonding companies promise courts to cover the cost of a judgment. In return, they usually demand collateral from a client such as Trump—or maybe particularly from Trump, given his long history of not paying his debts. One of them this month posted a bond in the much smaller judgment against Trump for defaming the writer E. Jean Carroll. But Trump was unable to obtain a bond large enough to cover the fraud judgment, even after approaching 30 companies. His lawyers said it was a “practical impossibility” in a filing. (Trump, ever helpful to his own defense, claimed on social media that he actually has more than $500 million in cash.)
The bond was due today, and Trump got his good news from the court just in time. It is a stay, or pause, not a permanent reduction. For now, the original judgment amount will still be due if Trump doesn’t win on appeal. Today’s outcome is neither a shock nor a travesty.
Offering temporary relief on the bond makes some sense. Imagine that the panel had not reduced the bond amount. Attorney General Letitia James could have started seizing his accounts or his properties, or else he would have been forced to start selling them. But this is a terrible moment to be selling commercial real estate, because the office market has not recovered from COVID. Beyond that, any buyers would know Trump was in a pinch and be happy to profiteer off him.
But then imagine that a few weeks from now, Trump won his appeal, convincing the court that Engoron’s finding was incorrect, or that the calculated amount of the penalty was unfair. Trump would have no way to recover the assets he’d been forced to unload at fire-sale prices. It doesn’t take any affection for Trump to see why a court would want to avoid such an outcome, and why—even if Trump would still be filthy rich—this would be unjust punishment.
The problem for Trump remains winning on appeal. He railed against Engoron in a statement and claimed that the judge was wrong on law, but legal experts told me that they thought Trump would struggle to win his appeal. Engoron’s decision was written in clear detail, as was his calculation of Trump’s penalty, which is based on how much ill-gotten gain Trump extracted from his fraud. “The judge here did a very good job,” Jim Wheaton, a law professor at William & Mary, told me. “Whether you agree or not, the judge very carefully made factual conclusions based on testimony in front of the judge. The judge made credibility decisions based on testimony of witnesses before him.”
Trump’s instinct for stalling the legal cases against him is pernicious. U.S. courts must find a way to balance the need for procedural protection with the principle that justice delayed is justice denied, and so far they have shown themselves ill-equipped; consider that the U.S. Supreme Court won’t even hear arguments about Trump’s immunity from criminal prosecution until a month from today. But forcing Trump to put a FOR SALE BY OWNER sign out in front of Trump Tower today wouldn’t serve justice, and might actually undermine it. As for Trump, he may just be delaying that outcome—but that’s another problem for him to try to wriggle, cat-like, out of on another day.
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David A. Graham
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