Legal proceedings have taken a crucial turn for Donald Trump, as the New York court rejected a $175 million bond posted on his behalf. Due to this setback, Letitia James, the New York State Attorney General, is poised to start enforcement proceedings on Trump's assets.
Times Are Changing. What's Coming for Donald Trump?
Delaware-based Knight Specialty Insurance Company tried to furnish a $175 million bond for Trump to fend off enforcement proceedings. Unfortunately for Trump, their documents didn't pass through the New York court, which demanded more details on Knight Specialty's financial strength. Their paperwork, rejected once, was refiled on April 4.
Eric Lisann, a former federal prosecutor, responded to lawyer Dave Kingman's disclosure that Knight Specialty may be hamstrung in posting the bond. Furthermore, Lisann hinted that the company might not have sufficient liquidity and lacked legally recognizable assurance that it could foot the $175 million bill if demanded in light of a judgment-affirming appeal.
Is Knight Specialty Insurance up to the Task?
Billionaire Don Hankey, who owns Knight Specialty, gave assurance that he could post the bond. Reacting to Kingman's remarks, he expressed confidence, overlooking the critics who argued that his company may not qualify for posting the bond in New York.
As a testament to its financial status, Knight Specialty upgraded its financial strength rating to A-(Excellent) from B++ (Good) by AM Best, a renowned rating agency, in April 2020. Is this upgrade sufficient to back their commitment to Trump, or will regulations hold them back?
Trump's Battle and Where He Stands Now
On April 1, Trump, anticipating the seizure of his assets amidst a civil fraud ruling, posted the said bond. It was meant to be a strategy to hold off New York point-woman Letitia James while he worked on an appeal. A previous ruling by Judge Arthur Engoron found Trump, his adult sons Donald Jr., and Eric, and The Trump Organization guilty of unlawfully inflating their net worth and assets for attractive business deals. Despite these proceedings, Trump holds his ground, maintaining his innocence.
To hold off the New York State from seizing assets to cater to the penalty, which, after piling up interest, amounted to about $454 million, Trump needed to post a bond slightly higher than the penalty. In a surprising turn, an appeals court allowed him to pay a lower bond of $175 million. This bond, however, was returned from the court's filing system and rejected due to incomplete paperwork, notably lacking a 'current financial statement.'
Letitia James raised queries about the "sufficiency" of the bond, mentioning that the bond's backing company, Knight Specialty Insurance Company (KSIC), doesn't qualify in New York. Thus, it couldn't get a certificate of qualification from the Department of Financial Services. Challenged by this information, KSIC had to refile its paperwork once again.
