New York state attorneys have questioned the legitimacy of the $175 million appeal bond that former President Donald Trump posted to delay the collection of a massive civil fraud judgment.
New York AG Seeks More Information About the Appeal Bond of Donald Trump
According to the Associated Press, New York Attorney General Letitia James' office, in a brief court notice Thursday, requested additional information about the bond from Donald Trump's legal team or the bond underwriter within 10 days to "justify" the bond.
The request aims to determine whether the underwriter, Knight Specialty Insurance Company, is financially capable of paying the bond amount if the former president loses on appeal and that the bond is appropriately collateralized.
Companies providing bonds not admitted in New York must show they can cover the total bond amount, demonstrating the firm's financial soundness and that the individual who owes money has provided enough collateral to cover the full bond.
That could mean revealing more details about the collateral Trump provided. The AP reported that Trump's attorney, Christopher Kise, accused James of provoking a "baseless public quarrel in a desperate effort to regain relevance" and labeled it "yet another witch hunt."
Knight has yet to comment on the matter. Last week, Trump won a bid to delay the enforcement of the $454 million judgment after an appeals court cut the amount to a smaller $175 million bond, which was posted on Monday.
Despite Trump's attempt to halt the enforcement of the judgment during his appeal, complications arose. The court system returned the filing on Monday for more documents, including a financial statement from Knight, which was submitted on Thursday.
Net Worth of Insurance Firm That Handles the $175 Million Bond of Donald Trump
In its updated bond, Knight Specialty Insurance Company, a Wilmington, Delaware-based part of the Los Angeles-based Knight Insurance Group, reported a surplus to policyholders of $138 million, the firm's net worth comprising its assets minus its liabilities, Forbes reported.
This figure is less than the $175 million that Donald Trump owes. Thus, if the bond was not fully secured through collateral or the former president could not pay the amount before the deadline, paying off the debt could completely deplete the firm's cash.
Knight Insurance Group Chairman Don Hankey told the AP that Trump's bond was collateralized through cash and bonds. The lawsuit, brought by the attorney general, alleged that Trump, the Trump Organization, and key executives engaged in fraudulent practices to inflate asset values.
Eric Trump, son of the former president and a senior executive in the Trump Organization, asserted that the bond was fully backed by cash. Judge Arthur Engoron, who handles the contentious civil fraud trial, scheduled a hearing about the bond issues on April 22.
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