UPDATE (Feb. 19, 2024 6:00 p.m. E.T.): This piece has been updated to reflect Donald Trump's most up-to-date estimated penalty figures, which include a fixed penalty plus accruing interest.
The massive judgment rendered against former President Donald Trump on Friday in the civil lawsuit brought by New York Attorney General Letitia James is a double whammy. Trump alone is on the hook for around $355 million, plus close to $100 million in interest, which is continuing to accumulate. That means he's on the hook for over $450 million — for now.
Paying such enormous damages seriously depletes the net worth of even a self-proclaimed billionaire. More devastating to Trump, the court’s decision eviscerates his public image as a shrewd New York real estate mogul — an image he has carefully cultivated for decades.
And there’s more.
Yet the enormous damages are not the only blow to Trump’s pocketbook.
The massive financial headaches for Trump are just beginning. Before he can appeal the verdict, Trump will have to post a bond or pledge assets equal to the verdict plus 9% post-judgment interest. This assures that if Trump loses the appeal, the state of New York will collect the money.
A business litigation observer previously told NBC News that Trump would have to pay a nonrefundable fee of around $18 million to obtain a bond (for a $370 million judgment, so slightly more than the actual judgment). Any company putting up the bond will demand collateral.
If Trump needs to pledge any New York properties or assets to the bonding company to secure the appeal bond, an independent monitor appointed by Judge Arthur Engoron would have to be notified by Trump in advance.
Engoron’s decision also blocked Trump from borrowing money from any financial institution chartered to do business in New York — America’s financial center. Yet the enormous damages are not the only blow to Trump’s pocketbook. The New York trial court barred Trump from being an officer or director of any New York entity, including the Trump Organization, for three years.
Engoron imposed a similar ban on Donald Trump Jr. and Eric Trump for two years and ordered each to pay more than $4 million to the state.
Engoron ruled last September that the Trump Organization used financial statements containing fraudulent asset valuations to misstate the value of its properties. In granting summary judgment in favor of James, the court held that Trump, his sons Donald Jr. and Eric, other individuals, and multiple Trump business entities are liable under an applicable New York law forbidding false business practices. However the court ruled that liability under other legal theories alleged by James that required proof of fraudulent intent, as well as any damages, would be determined in a trial.
That nonjury trial began in early October. It culminated Friday with Engoron finding Trump and his co-defendants had indeed distributed fraudulent valuations with the intent to defraud, including insurance fraud. This, despite the monthslong campaign waged by Trump and his counsel to impugn Engoron and the fairness of the trial, both inside the courtroom and on social media.
Clearly, that campaign has now backfired. Engoron’s detailed fact-finding, including his comment that Trump’s refusal to answer questions directly or at all as a trial witness “severely compromised his credibility,” will help prevent his verdict from being reversed on appeal.
Engoron negated Trump’s boasts about his genius for real estate by ruling that Trump “repeatedly falsified business records with the intent to defraud.” And the court concluded that Trump’s “refusal to admit error” demonstrated that the defendants “will engage in it going forward unless judicially restrained.”
No matter how rich Trump may be, legal liabilities approaching half a billion dollars constitute a financial disaster.
Trump’s serious money problems cannot be viewed in isolation. In another pair of civil cases alleging defamation, brought against Trump in New York federal court by E. Jean Carroll, two separate juries have assessed $5 million and $83.3 million in damages.
In the federal court system, too, Trump will have to post collateral or bonds aggregating $88.3 million plus interest if he wants to appeal.
No matter how rich Trump may be, legal liabilities approaching half a billion dollars constitute a financial disaster. Trump’s go-to plan has been to raise money from his supporters to pay his burgeoning legal fee obligations. Indeed, he has spent almost $50 million of campaign funds on lawyers’ bills in the past year.
But while Trump has already appealed to his followers for more money following this most recent verdict, it seems unlikely that he will be able to fundraise his way out of trouble this time. Also, the presidential candidate still has a political campaign he needs to fund.
On top of these three massive judgments, police officers and members of Congress who were in the Capitol during the Jan. 6, 2021, riot have filed their own civil lawsuit against Trump and others for their alleged roles fomenting the violence. Trump claimed that as president he was immune, but the federal court of appeals in D.C. rejected that defense in a ruling last December.
Trump’s strategy of seeking to delay the multiple criminal prosecutions against him until after Election Day doesn’t work for these civil cases. If elected president, Trump could dismiss the federal prosecutions and delay during his presidency any state prosecution. But the civil cases against him will proceed whether Trump is president or not. The Supreme Court unanimously ruled that a civil lawsuit against then-President Bill Clinton for his nonofficial conduct could continue during his presidency.
Trump’s repeated attendance, and voluntary appearance as a witness, at the New York attorney general’s civil trial felt telling. Trump’s business genius façade is crumbling. And that may be the outcome that he feared most.