Insurance Group Chairman Behind Trump’s $175M Bond Linked to High-Interest Car Loans

On Monday, Donald Trump secured a $175 million bond in his New York civil fraud case, delaying collection of over $454 million owed and barring the state from seizing his assets while appealing, according to a court filing.

A New York appeal court gave the former president 10 days to come up with the money after a panel of judges agreed last month to reduce the amount required to stop the clock on enforcement.

The bond Trump is currently filing with the court is effectively a placeholder, designed to assure payment if the decision is upheld. If this occurs, the likely Republican presidential nominee will be required to pay the entire cash to the state, which grows with daily interest.

If Trump wins, he will not have to pay the state anything and will receive the money he has already put up.

“As promised, President Trump posted bond. “He looks forward to defending his rights on appeal and overturning this unjust verdict,” said one of Trump’s lawyers, Alina Habba.

Until the appeals court intervened to reduce the needed bond, New York Attorney General Letitia James had planned to begin collecting the judgment, possibly by taking some of Trump’s most valuable properties. James, a Democrat, filed the complaint on the state’s behalf. Her office declined to comment on Monday.

The court ruled after Trump’s lawyers claimed it was “a practical impossibility” to obtain an underwriter to sign off on a bond for the $454 million, plus interest, he owed.

Knight Specialty Insurance, part of the Knight Insurance Group, underwrote the bond. The chairman of that company, billionaire Don Hankey, told The Associated Press that both cash and bond were used as collateral for Trump’s appeals bond.

“This is what we do at Knight Insurance, and we’re happy to do it for anyone who needs a bond,” said Hankey, who is best known in business for arranging high-risk, high-interest loans to auto buyers with bad credit. Hankey told the Associated Press he has never met or spoken with Trump.

Trump is seeking to overturn a judge’s February 16 ruling that he lied about his wealth while building his real estate enterprise, which propelled him to fame and the presidency. The trial centered on how Trump’s assets were assessed on financial statements that were submitted to bankers and insurers for loans and deals.

Trump denies any wrongdoing, claiming the words were disclaimers and not taken at face value by lending or insurance organizations.

The state courts’ Appellate Division has stated that it will hear arguments in September. A definite date has not been determined. If the timing holds, it will fall during the last weeks of the presidential campaign.

Under New York law, filing an appeal does not prevent a judgment from being enforced. However, if the person or corporation secures a bond guaranteeing payment of what is owed, the proceedings are automatically paused — in legalese, a stay.

Courts occasionally make exceptions and reduce the sum required for a stay, like in Trump’s case.

Trump’s lawyers had informed the appeals court that more than 30 bonding agencies were hesitant to accept a combination of cash and real estate as collateral for a $454 million-plus bond. The attorneys claimed that underwriters only wanted cash, stocks, or other liquid assets.

They stated that most bonding companies need collateral covering 120% of the amount owing.

Trump reportedly claimed to have about half a billion dollars in cash, as well as billions of dollars in real estate and other assets, but stated that he wanted to have some cash on hand for his presidential campaign.

Recent court debts have depleted Trump’s monetary reserves.

In addition to the $175 million he had to post in the New York case, Trump has posted a bond and cash totaling more than $97 million to satisfy money owed to writer E. Jean Carroll while he appeals decisions in two federal civil trials. Juries found that he sexually assaulted her in the 1990s and defamed her when she made the claim public in 2019. He denies all charges.

In February, Trump paid $392,638 in legal fees to The New York Times and three reporters after suing them over a Pulitzer Prize-winning exposé about his family’s wealth and tax habits.

In March, a British court ordered Trump to pay 300,000 pounds ($382,000) in legal expenses to a business he unsuccessfully sued over the so-called Steele dossier, which contained scandalous charges about him. Trump stated that those charges were inaccurate.

Trump might create cash by selling roughly 60% of his ownership in Trump Media & Technology Group, a recently listed social media company, but this is a long-term strategy. Trump’s investment could be worth billions of dollars, but a “lock-up” provision precludes insiders such as himself from selling their stock for six months.

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