The New York Attorney General’s office is pressing to invalidate a $175 million bond posted by former President Donald Trump, claiming that the financial backing for the bond is insufficient and improperly documented. Trump posted the bond as part of an appeal in a civil fraud case in which he was found to have fraudulently inflated property values to gain financial advantages, resulting in a $454 million damages award against him and his organizations.
The bond, underwritten by Knight Specialty Insurance Company (KSIC) has been a point of contention due to concerns about the firm’s capability to cover the bond and its financial solvency.The filing notes that the surety Trump used to obtain the bond, Knight Specialty Insurance Company, is “a small insurer that is not authorized to write business in New York and thus not regulated by the state’s insurance department, had never before written a surety bond in New York or in the prior two years in any other jurisdiction, and has a total policyholder surplus of just $138 million.”
The situation is further complicated by the fact that KSIC’s parent company is based in the Cayman Islands, raising additional questions regarding transparency and regulation. The New York Attorney General’s office has requested that Trump provide a substitute bond within seven days should Judge Arthur Engoron rule in favor of the motion to void the current bond.
Despite the AG’s challenge, Trump’s legal team maintains that the bond is financially secure and supported by a Charles Schwab account containing over $175 million in cash. An affirmation filed in court by Gregory Serio, a former New York state superintendent of insurance, asserts that the Schwab account is pledged to KSIC and that the bond is fully reinsured by KSIC’s parent company, Knight Insurance Company Ltd.
Trump’s attorneys are pushing back against the need for a hearing, stating that “The documentary evidence in support of justification is overwhelming and obviates any need for a hearing to set aside the exception or to justify KSIC as surety.” The judge has scheduled a hearing on the bond dispute, which will likely address the challenges raised by the AG’s office concerning Knight Specialty’s qualifications and financial well-being.
The background of this dispute lies in Judge Engoron’s February ruling, which found Trump and his organizations liable for years of inflating real estate assets to enhance Trump’s net worth, resulting in favorable loan terms and other financial benefits. Trump, now appealing the verdict, was compelled under New York law to post the bond to guarantee the judgment as the appeals process unfolds.
A hearing on the bond dispute is set for Monday.
Trump had to post a bond under New York law to ensure the judgment while he challenges the decision.
Relevant articles:
– New York AG says $175 million Trump fraud bond isn’t properly backed, should be voided, NBC Southern California, Fri, 19 Apr 2024 19:58:41 GMT
– Trump says $175 million bond is financially secure, asks judge to reject New York attorney general’s challenge, KEYT, Tue, 16 Apr 2024 04:13:58 GMT
– Cayman home to Trump’s ‘questionable’ bond supplier : Cayman News Service, Cayman News Service, Mon, 15 Apr 2024 18:12:04 GMT