The New York attorney general’s office argued on Friday that the $175 million bond posted by former President Donald Trump in the civil fraud case against him and his company should be thrown out, claiming the company that underwrote the bond hasn’t shown it has the financial capacity to pay it. This comes ahead of a Monday hearing on the fate of the bond.
Trump was ordered to post the $175 million bond in the civil fraud case after he and his associates were found liable for fraudulently misstating the value of assets in order to obtain more favorable business deals. This was only a fraction of the total amount of over $464.2 million that he and his co-defendants owe in the case.
The bond was posted in April and was underwritten by Knight Specialty Insurance Company (KSIC), a California-based company chaired by billionaire Don Hankey. The attorney general’s office challenged the bond days after it was posted, asking for more financial information from KSIC to prove they could cover the full $175 million, prompting the insurance company to defend its finances.
In a new filing, the attorney general’s office argued that the information provided by KSIC was still insufficient, claiming that the company had not shown the actual financial ability to pay the $175 million. The state also alleges that KSIC is using a “shadow” company in the Cayman Islands to appear more financially stable than it actually is.
The state also raised concerns about Trump’s collateral, citing that there is nothing suggesting the money used to collateralize the bond is “locked,” meaning Trump could withdraw some of that $175 million at any time. The state accused KSIC’s management of being untrustworthy and incompetent.
Judge Arthur Engoron will hold a hearing on Monday to address the bond issues. The state has asked for the bond to be declared invalid and for Trump to replace it with a bond underwritten by a new company within seven days. Trump’s lawyer and KSIC have not yet responded to requests for comment. If Trump loses the fraud case on appeal, he will still be on the hook for the full payment, even though he only had to pay part of it to secure the bond.
