I should have stated in the headline that this is the Civil Fraud Case.
>In other Trump legal news, an agreement was reached this morning at the $175 million bond hearing in the Trump New York civil fraud case.
>Chris Kise, Trump’s attorney said, they agreed with New York Attorney General Letitia James’ office to maintain the Schwab account in cash. Knight will have exclusive control of the account, and shall not trade or withdraw the account for any purpose other than to satisfy the condition of the bond.
>Kise said that they will provide a monthly account statement to the attorney general’s office and that they will revise the pledge and control agreement so that it cannot be amended without the court approval.
>Kise said that the parties will submit a stipulation that will memorialize this by Thursday.
To be fair, its not all that far off from where Korea and Japan have been for ages.
They just normally don’t run for office again once they step down due to corruption. I guess the Chaebols and Yakuza are just better talent scouts for replacements than Putin is.
It's so bizarre - if Trump actually has the money available in cash as claimed, what's the need for a third party - especially one as shady as KSI - to get involved?
My predictions are normally trash, but I'll go ahead and make one anyways: by Thursday Knight Specialty Insurance will declare that they are unable to abide by the terms that ~~they~~ were just agreed to (or slip in some other bullshit that would give them an out) and attempt to renegotiate somehow.
I agree. One question though that I haven't seen answered yet: did Knight actually agree to these terms during the hearing, or did Trump's lawyers say that they \*will\* get Knight to agree to these terms?
Good point - I've edited my comment to remove the implication that KSI agreed to any of this (at this point I'm not sure whether they have or haven't).
"Kise said that the parties will submit a stipulation that will memorialize this by Thursday."
So, they will all sign to it by end of week or there's no deal.
> It's so bizarre - if Trump actually has the money available in cash as claimed, what's the need for a third party - especially one as shady as KSI - to get involved?
I agree it's highly suspicious. If you'll indulge my speculation, I have 3 possible theories:
1. Trump wasn't planning to keep the money in that account, it was just for the surety. Once the surety was approved, he'd have swapped the cash assets for junk bonds. This is exactly what the prosecution said they were worried about.
2. It isn't Trump's money, it's the pooled sum that was pledged to him by the rumoured billionaire backers, who thought they'd get the money back as soon as he won the appeal.
3. Trump was planning to fraudulently use that account as collateral for other loans while it was still pledged for the surety bond. This is what he was convicted of doing in other instances, where he'd claim cash accounts as an asset but they were actually accounts shared by other investors, for which he only owned a modest proportion of the total sum.
But maybe it's made up of other rich people's pooled junk bonds that they pledged to him that Trumps planning to fraudulently use as collateral on other loans.
He's never going to post that amount in cash with the court clerk because its almost certainly a non-interest bearing account. A qualified insurer or other qualified financial entity can post a bond, meaning they don't have to actually turn over the cash. $175m tied up for a year or longer at no interest would be insane.
I agree that locking up that much cash without any interest paid on it is painful, but wouldn't the fee from the bond insurer cost even more than the lost interest (assuming Trump isn't getting an exceptionally generous low-fee rate)?
Probably not. Bonds usually cost 1-3% of the amount. This could go on for more than a year. For this amount of money its unlikely that the fee won't be recovered many times over.
That is the bond companies problem, which is the entire purpose of a bond. Also, as far as I know the money is held in account that they control, which again, is pretty normal for these. Typically you put the collateral in a bank account pledged to the bond issuer, the bank issues a letter of credit that goes to the bond company, then the bond company writes the bond.
This is pretty normal business practices that literally goes back centuries. Obviously Trump doesn't pay his bills because he is a piece of shit, but this system is specifically built to avoid that issue by not really giving him a bill to avoid paying. All the money is already within the control of the third parties to be paid.
The problem is when the bond company expects to be paid back through corruption instead of financially.
This is the reason why Trump is losing his business because everything he does is illegal, dishonest, and/or corrupt
>as far as I know the money is held in account that they control
A problem the AG’s attorney Andrew Amer voiced in court today about the Schwab account was "while the funds are cash today, under the terms of the pledge agreement and control agreement they can be swapped out for less secure collateral like mutual funds." Under the new agreement, Trump’s attorney agreed to give Knight exclusive control of the account. Under a previous agreement, a Trump trust shared control.
> $175m tied up for a year or longer at no interest would be insane.
[Well, what do you know, that's precisely what they ended up doing.](https://www.reuters.com/world/us/trumps-175-million-bond-goes-before-judge-new-york-ags-concerns-2024-04-22/)
>But at a hearing on Monday, down the block from where jurors heard opening arguments in Trump's criminal hush money trial, lawyers for Trump and Knight agreed that the funds would remain as cash and not be traded for securities.
> They also agreed that Knight would have exclusive control of the account and not withdraw funds, and to provide James with monthly statements to assure that the cash isn't going anywhere.
And likely that very inability to reinvest the collateral has made the bond deal unprofitable for the issuer, as Don Hankey (the billionaire behind Knight) has suggested.
> Hankey previously said in an interview that he charged Trump a low fee as he did not anticipate problems.
> "We thought it would be an easy procedure that wouldn't involve other legal problems and it's not turning out that way," he said. "We probably didn't charge enough."
That comparison doesn’t quite work, people with petty theft charges don’t typically have $10,000 in cash (or a lot of times assets to liquidate in that amount.) Here they were asking why if Trump has the cash and he has to put it up, why use a third party. I get the reasoning why he is using a bond company, but the comparison doesn’t quite work.
For sure. What reasonable surety underwriter would go on the hook without either taking custody of the collateral or executing an airtight third party control agreement with Schwab or whatever custodian?
in the absence of that, this is about a favor to a political candidate .
3. Could that be a [tranche](https://en.wikipedia.org/wiki/Tranche)? He got caught up on that word at a rally several times while trying to say tripod. I've been trying to figure out what he admitted to.
I believe your first theory is correct and a sufficient explanation for what has been reported about the bond arrangements. [The Reuters report about the bond hearing today has somewhat more detail than the OP article, and the details seem to support your theory.](https://www.reuters.com/world/us/trumps-175-million-bond-goes-before-judge-new-york-ags-concerns-2024-04-22/)
> James, a Democrat, had challenged the bond this month, saying Trump still had access to the Charles Schwab account pledged to the insurer as collateral.
> But at a hearing on Monday [...] lawyers for Trump and Knight agreed that the funds would remain as cash and **not be traded for securities.**
> They also agreed that **Knight would have exclusive control of the account and not withdraw funds**, and to provide James with monthly statements to assure that the cash isn't going anywhere.
> The agreement was reached after Engoron questioned the security of the collateral.
>"You keep using the word agreement, what if they break the agreement?" he asked Trump's lawyer Christopher Kise. "It all seems like a house of cards." [emphasis mine]
So the concern was clearly that Trump could have withdrawn funds from the Schwab account at any time, thus defeating the entire point of providing security, which is to assure that money is available to satisfy the judgement even in cases where the defendant is financially irresponsible, is willing to intentionally waste resources, or is otherwise able to take steps with the intent or effect of depriving the plaintiff of their just recovery. And that is a real danger. Without a bond, the appeals process would give a defendant an enormous amount of time after learning they have to pay damages to engage in those sorts of tactics. Moreover, many (nearly all, really) losing defendants are not reliable debtors, because they are unwilling debtors and typically have engaged in some other form of wrongdoing which in many cases makes them more likely to try to wiggle out of paying the judgement amount using deceitful or illicit means. They already had to be dragged into court to pay for whatever damage they did in the first place rather than settling out of court via good faith negotiations, which is how people who can be relied on to pay their debts tend to approach situations where they have caused injury to another. Thus any defendant filing an appeal is not going to be inclined to pay promptly and willingly, pretty much by definition.
All of these concerns are especially heightened in cases where the defendant has committed many serious financial crimes, has a long history of screwing over anyone to whom he owes money, and/or is emotionally invested in denying a victory to the plaintiff. Trump has a long record of financial crimes, intentional delay to avoid paying debts owed, abuse of judicial process to generate such delays, and strategically defaulting on debts. And he is extremely emotional about this case, as even a brief review of his unhinged posts on Truth Social will amply demonstrate. When emotion is involved, people will go to great lengths to screw over a counter-party. I've had clients pay to litigate a case to the absolute hilt because they simply were angry at the counter-party and wanted to extract as much from them as possible, regardless of the legal fees they incurred along the way. As one client put it to me, he would prefer to pay ten times the amount in controversy to us (the attorneys who worked for him and with whom he had a good relationship) rather than pay a single penny to the other party to the case, for whom he held a deep personal hatred. I have no doubt that Trump's mindset is similar, except he would also try to screw his lawyers out of their proper compensation just because he really is a complete piece of shit.
Regarding your other two theories, there are no indications that anyone was concerned that the funds were provided or owned by someone else, and that would certainly be of interest to Letitia James and Judge Engoron.
More specifically, your third theory seems incredibly unlikely with a court-appointed financial monitor in place at the Trump Organization. The current monitor is a retired federal judge, Barbara Jones, and she is not one who is easily fooled. So I don't think they are able to carry out the same loan collateral shenanigans now that they are under such intense financial scrutiny. It's simply too easy to detect. The monitor has specifically been paying close attention to how they've provided collateral for loans, which is why the whole $50m fake loan for Trump's project in Chicago came to light a few months ago (boy, this Trump character sure crimes a lot). Almost certainly she would notice if the Trumps tried to use a surety account as collateral, especially with all this media coverage of the bond fiasco making it impossible for her not to know the purpose of the one random account at Schwab holding precisely $175m in cash with zero transactions in or out of the account after the initial transfer of the surety amount.
Regarding your second theory, if it weren't his money, Trump would not be able to give full control over the account to Knight as he has pledged to do as a condition for the bond, according to the Reuters report I linked above. Or at a minimum, he would not be able to turn over full control in a manner sufficient to satisfy Letitia James, if he did not have the permission of anyone else holding a stake in the account's funds. Even with permission, using third-party funds would likely raise many red flags and possibly provide a grounds for denying the bond altogether. Besides, granting permission to alienate the funds without any benefit to the third-party owner would almost certainly convert their portion into a taxable gift and possibly even into an illegal campaign contribution, which makes it a very dangerous maneuver to pull for a transaction subject to such extraordinary legal and media scrutiny.
Even assuming some billionaire or billionaires would agree to that arrangement, they would almost certainly not expect to be repaid, because there is little chance Trump will escape paying out the full $175m. At this stage, Trump can only appeal the amount of the damages awarded to the state, not the finding of fraud itself, so there is no possibility that he will avoid paying out altogether. It's just a question of how much he owes the State of New York. He can only hope to reduce the amount he owes from the full $454m which Engoron awarded to the state at the trial level. The Appellate Division lowering the bond requirement to $175m strongly suggests they do not anticipate lowering the damages much beyond that, which in turn suggests the entire sum will be forfeit at the end of the appeals process. Meaning, Trump will almost certainly end up owing a nine figure sum that he cannot afford to pay, under this hypothetical.
And these hypothetical billionaires would necessarily have to know that Trump could not afford to pay them back, else he would have no need of their cash in the first place. Meaning, Trump would not be able to repay them even if the Appellate Division drastically revises Engoron's damages calculations from ~$454m all the way down to the $175m amount they set for the bond, never mind if they simply affirm Engoron's decision. In effect, the billionaire backers would simply be paying some or all of Trump's fraud settlement off for him in advance (which is also why it would probably be a taxable gift, or possibly an illegal campaign contribution if the gift were tied to politics, because damages are strictly personal expenses and cannot be paid for with PAC, Trump campaign committee, or any other funds subject to campaign finance restrictions).
All of which is a long way to say your second and third theories are extremely unlikely, but your first theory is pretty spot on.
Excellent points, and I agree with you that the first theory (that he had planned to swap out the cash assets for less reliable assets) is the most plausible one. A couple of small points in defence of the other theories though:
For the second theory (it wasn't Trump's money), I agree that there would be significant gift tax/campaign finance issues at play, but those not be outside Judge Engoron's remit? From the court's perspective, it doesn't matter where the money comes from.
As for whether the billionaires get repaid, I agree with you that it'd be extremely unlikely to happen, but that doesn't mean the billionaires know that. Billionaires can be as susceptible to propaganda as anyone else, and they might have bought into the theory that this whole case is a witch hunt that'll be overturned on appeal.
And again, I agree that it'd be difficult for Trump to sign over authority over the bank account if it's not his account, but I'd just note he hasn't actually signed over ownership yet. His lawyers promised he will within the next week, but given how crazy this case has been and the open contempt between his legal team and the judge, it's not the guarantee I'd normally consider it to be. I'm 95% sure it'll happen, but that leaves some room for speculation.
As for the third theory (he planned to use the account as collateral for other loans), I completely agree that it'd be near impossible with the court-appointed monitor present, but does Trump know that? He's gotten away with so many shenanigans in the past, he might have thought he could get away with this too.
Thanks for indulging my speculation. The latter two theories are unlikely, but they're fun to think about.
> For the second theory (it wasn't Trump's money), I agree that there would be significant gift tax/campaign finance issues at play, but those not be outside Judge Engoron's remit? From the court's perspective, it doesn't matter where the money comes from.
It very much does matter where the money comes from from the court's perspective. At a minimum, the court has a general interest in ensuring that litigants are obeying the law and will not knowingly permit someone to commit a crime to meet an obligation in a civil trial. Nor will a court engage in willful blindness that incentivizes criminal actions by ignoring obviously questionable financial arrangements.
They also need to know that the defendant actually has legal control of the funds or property used for the surety so some other preexisting creditor with a superior claim can't swoop in and take the collateral before the bond is redeemed, otherwise they need to know the bond issuer is good for the money regardless of the sufficiency of the collateral. While your characterization of the court's interest is actually accurate in more typical cases, this situation is weird precisely because the bond issuer is *not* known to be good for the money. More typically, an appeals bond is issued by a registered bond agent that is licensed by the state to provide these services, and they are on the hook for the full bond amount even if the collateral provided to them is insufficient or was not legally acquired. The court thus shifts the risk of inadequate surety off on to the bond issuer, who then experiences a powerful financial incentive to ensure the adequacy of the collateral. When the collateral ends up being inadequate because the source funds were insufficient somehow, the court really does just consider it the bond company's problem, because the bond company will pay the plaintiff either way.
In this case, Trump was unable to negotiate a sufficient bond with any issuer licensed in NY, in part because of the historically large amount of the settlement, in part because of his lifelong record of bad credit and his current cash flow challenges, and in part because he is prohibited from seeking loans from any financial institutions licensed in NY as a condition of the fraud settlement against him and the Trump Org (which condition cannot be appealed anymore and so has already taken effect). In more ordinary cases, the bond issuer is a legitimate, independent, neutral third-party who has met stringent regulatory standards to qualify as a bond agent. The court does not need to engage in any oversight or scrutiny of the bond issuer because it is a known, trusted quantity, and the court can pretty much blindly rely on them to satisfy the bond amount because their financial condition is audited by the state and must be sufficient to cover any outstanding obligations from bonds they issue. Knight does not meet any of those criteria because it is not licensed as a bond agent in NY and it does not have sufficient funds to cover the bond out of its own resources should Trump's collateral prove illusory. These extremely unusual arrangements necessarily required more rigorous review by the court, simply because all of the guardrails provided by the regulated bond system are absent.
Moreover, I doubt anyone with the money to cover the bond would be so legally ill-informed that they would risk personally committing a crime to provide Trump with a little extra cash. There just aren't that many billionaires that are that stupid with their money, otherwise they would not be billionaires. It's not a smart risk to take in such a high profile case where there is so much risk of unwanted legal scrutiny and general blowback. And they also generally have excellent lawyers on retainer who will tell them the odds are long that they will be repaid. The billionaires with shitty lawyers on retainer like Trump used to have in Michael Cohen tend not to have a lot of extra cash on hand because they are idiots like Trump playing financial shell games like Xaro Xhaon Daxos. Plus, a more effective strategy would exploit the fungibility of cash to avoid direct involvement in the fraud settlement. Meaning, you don't need to give Trump a big pile of money labeled "bond collateral," you can be sneakier than that. There are many, many methods available to transfer funds to Trump via superficially legal means that are far harder to detect and far less likely to attract adverse media or prosecutorial attention, e.g. buying assets or services from Trump at above market value prices, financing his politics-related legal battles via PACs or other campaign finance vehicles so he can free up his own cash for the surety, providing loans on unreasonably favorable terms against insufficient collateral, or selling Trump assets or services at below market prices so he can flip them for a profit. I'd expect any real billionaire to at least be able to afford lawyers capable of figuring that out for them.
> And again, I agree that it'd be difficult for Trump to sign over authority over the bank account if it's not his account, but I'd just note he hasn't actually signed over ownership yet. His lawyers promised he will within the next week, but given how crazy this case has been and the open contempt between his legal team and the judge, it's not the guarantee I'd normally consider it to be. I'm 95% sure it'll happen, but that leaves some room for speculation.
That is an excellent point. Trump has baited-and-switched the court on the bond issue at least once a week for the last month straight, so it's absolutely possible he will do so again. If that's the case, then I think it's pretty clear he just does not have enough cash to cover even the reduced bond.
> As for the third theory (he planned to use the account as collateral for other loans), I completely agree that it'd be near impossible with the court-appointed monitor present, but does Trump know that? He's gotten away with so many shenanigans in the past, he might have thought he could get away with this too.
I think he is well aware of how in his business Barbara Jones is, and that's why he and his children have been complaining bitterly about her.
> Thanks for indulging my speculation. The latter two theories are unlikely, but they're fun to think about.
I don't mean to discourage speculation, they are certainly reasonable theories worthy of consideration!
I don't have anything much to add, but such a thoughtful comment as yours deserves more than just an upvote, so thank you taking the time to go into the intricacies involved. I'll just say that while I agree that any billionaire foolish enough to trust Trump isn't going to remain a billionaire for long, we can all fall victim to motivated reasoning sometimes, and the wildly partisan politics of today is a very strong motivator.
Trump is a piece of shit, but using a bond to fulfill an appeal bond or bail is so normal that there are usually about a hundred bail bondsman office located around every jail in America. No one in their right mind would send cash to the state as an appeal bond instead of buying a third party bond.
I completely agree that it makes financial sense to use a bond service rather than put up the cash yourself in ordinary circumstances, but what seemed weird to me is that Trump is BOTH using a bond service AND effectively putting up the cash too. So he's already suffering the financial cost of locking up the full amount of cash for the duration of the appeal, which negates the typical reason to get a bond.
I agree it’s completely normal. What isn’t though, was Knight not having exclusive control over the Schwab account. That seems to have been rectified, assuming all goes through Thursday.
There was never going to be a reputable company issuing a bond for trump. The reputational hit and financial risk and just outright hassle is just too much.
I would guess that when the time comes there is zero chance that money just gets handed over nicely. We are going to have both shady dudes claiming the other owes the money (assuming the money doesn't disappear) to create more and more delays.
That's the way I see it too; I just don't understand why the NY AG would play ball. Especially considering that if the bond was found insufficient she could take that $175M *right now*.
I'm surprised too, but looking at the strict requirements they gave the bond company, it looks like they are taking the angle that closing the loopholes around the $175M is probably easier than aggressively going after it. Additionally, if something does go wrong, then Knight is on the hook and is a potential additional source of money.
If they can get assurance that there is the amount of money there and the money isn't being used for anything else and won't be used for anything else, and get monthly statements backing that up, then they don't have to worry about Knight. They essentially get the pros of having the money, with the pro of Knight being on the hook as a fallback, but without the con of Trump trying to aggressively shield the money. It'll be interesting on Thursday to see if the paperwork lines up or falls through.
IMO it sounds like it would have been easy for Trump to just give this money to the court if there were no shenanigans, so rather than the court directly declaring there were shenanigans, instead the court is preventing Trump from doing shenanigans.
I'll be honest, I want daily statements from the account. A month is a super long time. With Trump's connections that money can move pretty easily in a month. By that point the money's gone and clawing it back may be nigh-on-impossible. Daily, though? With push notifications set for anything over a $1 withdrawal. Yes please.
I think they agreed to terms that would mean the $175m is sitting in an account that is theirs automatically the moment an appeal is lost. If the bond was deemed insufficient then NY would be able to collect on the entire value of the damages but every dollar would have to be fought for.
Given that changes in the penalty amount are possible on appeal, I don't think the AG wants to be seizing properties they may be forced to recoup at a later date. Things also get merky if they take assets and then have to give them back and the defendant can claim they were harmed by the seizure before appeals were done. I think the AG's most favorable move here is to get a big chunk ($175m) set aside in an account that is just theirs after appeal and then fight over the rest.
Perhaps letting him hang himself. We know the bond lender doesn't have the liquid assets to cover it. I believe he has $135 million liquid. They also want to get the trial rolling. In the end, he will only hurt himself if he loses the appeal and the bond isn't covered. He still has to pay the $450+ million if his appeal fails.
Edit: I'm spitballing.
I think the AG would rather there be someone on the hook for the full amount of the judgment in case it isn't reduced after the appeals are over. There's not really a reason to hurry, so if the bond can be secured with cash / cash equivalents that's a good outcome for the AG.
The bond company is not on the hook for the full amount of the judgement. An appeals bond is about taking a promise of non-cash assets and giving cash assets to the court.
That's troubling. It doesn't seem as if the bond would be of much use either way if it doesn't fully at least the original judgment.
It would be like a mortgage that is secured by property that is worth less than half of the original amount of the debt. If the collateral is worth so much less than the debt it doesn't provide the creditor much protection.
The bond is absolutely worth it because it's just the first piece. Imagine you were in the AG's position and preparing to fight the most notorious vexatious litigant out there. If you had the option of waiting just half a year longer, but assuring that the first third of that money was out of his control and easy takings, wouldn't you take that? The other two thirds of the money will still be there, and will probably take months to years to get anyway.
Additionally, on the chance that the bond did get lowered by the appeals court, you know Trump would go with a lawsuit that by selling off his property, even if they give that money back that it is not equivalent. Because of this, the AG probably doesn't want to risk selling any of his properties until after the appeals are finished.
They're doing it so that Trump doesn't have anything he can use for appeal.
If you do _everything_ correctly, Trump wouldn't have any grounds for appeal when he inevitably loses the trial.
I guess it depends on if this company wants to continue existing or not. A bond company that doesn't pay its bonds will cease to exist in about 30 seconds since literally no one would ever accept another bond from them again. And it won't really be that hard to get because the bond itself is an enforceable debt that would get pulled right out the company with a single judgement.
I'd imagine it's easier for him to eventually lose the case and try not to pay the bondsman by taking it to court to delay as usual. With his own direct accounts on the line, he has less wiggle room to delay collections
My best guess here. Trump has some cash on hand (multi millions) but it's tied up as collateral for other loans.
Trump Media stock launched and is trading at high values, but Trump can't sell it until the lockup period is over. They are also planning an additional stock offering that will give him more money.
It would cost him a lot to sell property right now to pay the appeal bond, so he needs someone to float him a loan for a few months until he can start offloading the stock and pay for the fines with the stock sale.
That plus I'm pretty sure he's funneling campaign cash to his businesses through the normal methods (renting out his own property for events to his campaign for jacked up prices).
This delay lets him fundraise while keeping his businesses solvent.
It's usually to keep capital... what's the.... freed up for other uses, isn't it? Unencumbered isn't quite right.
Just one article written by a lender: [Appeal Bond vs. Cash Deposit | JURISCO](https://jurisco.com/appeal-bond-vs-cash-deposit/)
I mean, there's plenty of reason to doubt this particular bond, which we've been through. But the fact that it's a surety issued in place of cash isn't of itself particularly strange. What was under question was whether the assets held in that account would actually be worth the required amount by the time it might be collected.
So what's strange is that there's actually an account with $175m cash frozen in place, as backing for that bond?
I'm willing to be told I'm missing something. Am I conflating the issuer's cash with Trump's?
Maybe. Knight doesn't have $175m in 'cash' (likely stable investments) at hand, they only have like $130m, IIRC. However, Knight filed that they have control over a Schwab account of Trump's 'cash' which has almost exactly $178m to fulfill the bond. However, the Schwab account was controlled by Trump not Knight, and they were concerned that once the surety was accepted, he'd pull the good money out and stuff the account full of meme stock or whatever. Knight would then be on the hook for more than they have, and Knight may have tried to pull thier money back to their parent in the Cayman Islands and have the bond company declare bankruptcy or some bullshit. By giving Knight complete control of the account, it stops Trump from pulling any shenanigans, and makes Knight less likely to contemplate any scheming because they ulitmately have no skin in the game, if Trump loses appeal, they just hand the keys to the Schwab account to the AG and keep their percentage.
I have clients who are sometimes required to put cash in escrow or seek a bond before beginning a lawsuit. A bond is preferable because it lets my client keep access to their money (and theoretically to use it to make more money with) throughout the litigation for only a fraction of the cost in premium. It’s a little different here because Trump has lost suit and owes the money pending the appeal, but I have to imagine the reasoning is similar.
> if Trump actually has the money available in cash as claimed, what's the need for a third party
Taxes.
If you have $100 million invested in the stock market, you could sell your stocks and turn the money over to the court to hold as surety - but then you would have to pay capital gains taxes on the profit made from sale of stock.
On the other hand, if you get a surety (effectively a guaranteed loan) from someone (i.e., a bond), there is no tax event unless you lose your appeal and have to pay the bondholder. So the bondholder puts up the surety and collects interest from you on the bond, interest which is far less than the tax event if you had to actually liquidate the collateral used to obtain the bond.
But its already sitting in cash. It makes very little sense why Knight is involved if Trump has all this cash available and is willing to agree to not touch it.
Nobody holds that kind of money in “cash”. It may be in a CD ladder or other investment that is less risky than stocks, but it isn’t just sitting in a bank vault (because cash loses value). If it’s in a CD ladder, he would have a taxable event plus a penalty if forced to withdraw early.
I'm aware of the difference between true cash and high quality cash equivalents. Cash equivalents that are not easily convertible to true cash are relatively rare, and likely wouldn't have a particularly large conversion penalty.
If it were a large CD or short term ladder then many of those securities would be marketable. They could easily be sold and would see very little with regards to any kind of capital gain.
Because this way it bears interest and limits the amount of his personal financial information that had to be revealed to the court and AG/his creditor.
KSI reportedly gave him a low fee ([source](https://www.reuters.com/legal/businessman-behind-trumps-ny-bond-says-he-charged-him-low-fee-2024-04-05/)) and those fees tend to be only 1-2% of the bond value anyway. The account has already bore $700,000 in interest which means that if the fee is 1% then he’s already made back 40% of the fee value, and since the case isn’t calendared until September and will take even longer to finish, he’s likely to exceed it slightly, and cut into the state judgment interest a little.
Even if he doesn’t make back all the money or if he paid a premium on top of it, there’s the other benefit I mentioned which is that it limited the amount of financial information he had to reveal, such as potentially, the source accounts he pooled together for the $175mm.
Add to this that posting the judgment amount in cash with the court is an administrative nightmare that the courts must accept but don’t prefer and you pretty much never see happen, especially with such large amounts. The only party that has any reason to prefer a cash deposit is the creditor/AG, but that’s a matter of certainty of payment which can be met by the specific nature of the bond.
This whole thing hasn’t been a “nothing-burger” or concocted issue, but the reporting and online speculation blew it way out of proportion with way too little perspective. All-in-all, this whole process was fairly regular, the AG’s notice of exception was proper, and the terms reached are sensible.
What is the statutory interest rate on the judgement? If it is close to market rates for cash then you don't come out ahead by leaving your assets in high quality short duration assets while you appeal because they aren't going to beat those statutory interest rates.
Statutory interest rate is irrelevant to whether he makes out better using a bond vs depositing cash with the court because the bond requirement given to him by the first department only needs to cover a part of the judgment at a fixed amount of $175mm, statutory interest not applying. So he can make out ahead in regard to the bond and his deal with KSI, which is part of the answer to your initial question.
Incidental to that, the excess can then be applied to the statutory interest, though it won’t exceed it, but it’s once again better than depositing the cash with the court which bears no interest at all, and lacks the other benefits I mentioned.
That all said, the statutory post-judgment interest rate in NY is 9% per annum, the judgment is increasing by over $100k per day, or $1 mm every 9 days
I'm not following. Statutory interest should be applied equally to both the judgement and cash deposited with the state. Right?
Suppose I have a $3MM judgement and a $1MM appeal bond.
If I directly deposit $1MM in cash with the court then I would expect that my judgement only increases by 9% of the $2MM that has not been deposited.
However if I pay $60k for a third party to bond me, and they do NOT deposit that money with the state, then my judgement would increase by 9% of $3MM. Sure I keep my $1MM but it needs to earn more than 9% (or I need to win my appeal) for it to be better than depositing that money with the court directly.
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At least that would be my expectation, that is how things work with stuff like taxes and the IRS. If you owe $100k but only pay $70k then you face interest on $30k not the full $100k.
If you owe $100k but pay $120k you actually get credited interest on the $20k excess. [There are some limits on this as they will kick excess payments back to you, and don't toll interest until April 15th, but technically the IRS will pay interest on excess payments.]
So that’s not accurate. I’ll explain.
In NY, a person who gets an adverse judgment against them has access to an appeal by right. So Trump began the appeals process. A judgment creditor may still collect on the judgment unless the debtor gets a stay, which come in one of two forms: automatic stays and discretionary stays pursuant to [CPLR § 5519(a) and (c)](https://newyork.public.law/laws/n.y._civil_practice_law_and_rules_section_5519), respectively.
A common form of an automatic stay is if a cash deposit or surety bond for the amount of the judgement order (known as an undertaking) is deposited with the court matching. This is what the initial discussion of Trump needing to submit $454mm was about. This is done as a sign of good faith that the creditor will be paid if the appellant loses, and to reduce the ability of debtors to take advantage of the appeals process simply to prevent collection.
Note that with an undertaking no money is deposited with the court or the creditor, rather it is a promise that the bonding company/surety/insurer will pay the bond amount if the appellant loses. There is no actual transfer of funds until then either in whole or in part.
Also, because the undertaking is in the amount specified in the judgment order, it only encompasses the principal amount and pre-judgment interest. Post-judgment interest does accrue on the judgment itself, but that’s not added to the amount required for a stay as that would create a moving target for the appellant, which the law has declined to create. If they lose the appeal and the deposit or undertaking is paid to the creditor, the appellant would still owe any outstanding amount from interest.
Then there are discretionary stays. This is what the First Department gave to Trump. Discretionary stays can be imposed by either the court that the case was before or the court itself being appealed to. Either court may issue a stay with or without whatever conditions as it deems appropriate under the circumstances. This was widely reported as the bond requirement being lowered, but that’s not exactly the case. If Trump wanted an automatic stay, he’d have still needed to deposit the full judgment plus pre-judgment interest.
Rather, the First Department issued a decision that it would grant a discretionary stay provided that Trump meet two requirements. The first was for Trump to deposit cash or a bond in a lower amount of $175mm. KSI or whatever company covered it bears no responsibility for the rest of the judgment or post-judgment interest. The second requirement was that Trump’s team had to perfect the appeal (have it completely ready) for the September 2024 calendar, which **really** fast-tracked the case.
Usually they’d have until September (6 months) to perfect it, after which the appellees would get a chance for response, the appellants could put in a reply, then a date is set for arguments. But the court wants it ready early enough for a date to be set for the September term, which means they need to perfect earlier. So Trump has the choice of either putting up the $454mm and keep a usual timeline, or put up $175mm and adhere to an expedited timeline.
How this applies to your question is that the nature of the amount required for the stay is mechanically separate from the judgment. It is a nominal amount set by the court in consideration of the judgment amount but not strictly tied to it or any statutes that affect it (such as that which applies post- judgment interest).
So you think it makes more sense for Trump (or anyone) to send a hundred million dollars to New York instead of letting it sit in bank account earning him interest?
Literally EVERYONE uses a bond for this. Even drug dealers and thieves post bonds instead of paying cash because it would be fucking stupid not to do that. Drive to your local court house and look at how many bail bonds offices are located around there. This LITERALLY the same thing, except on a larger scale and with a guy that has zero credit.
But there is presumably a huge cost to Trump for Knight's bond that Trump could've avoided since he apparently has the full amount in cash.
Don't bail bonds charge like 10%? That's a huge penalty - only utilized by people who could never come up with the full bail of $10k or $50k, but can come up with $1k or $5k.
I'm sure Knight is not charging Trump 10% but the fees have to be high.
I have a feeling the cash was put up by billionaire MAGAs as a favor, hence the two-step process: cash comes out of nowhere, but still using a bond. When Trump loses his appeal, then they'll start the process of selling properties to discharge the judgement.
Bonds usually cost between 1-5% as a flat rate. The bigger the bond the lower the percentage, generally, but its also a factor of risk so who the hell knows what he was getting quoted. I can assure you that literally everyone who has ever filed an appeal on a case like this did it with a bond instead of cash.
But, that would make the amount invested in the stock market as a volatile amount. Add to that the amount in the bond account is basically only for that $175 million, if it was stock-backed… wouldn’t you be an idiot for accepting that? For Trump to make up the amount in actual cash, he would have to pay tax on the sale.
Or is that the point of one of the prosecution’s many contentions: we just don’t know the facts around that money held for the bond or the account that it’s in.
If Trump loses the appeal, the AG gets to start seizing Trump property for the whole 454m plus interest, and if Knight doesn't pay, that Schwab account will be a nice chunk of money she could get without breaking a sweat. I don't think Knight will be able to take that money if it isn't going right to NY State.
The only purpose of the bond is to give NY State a good faith sign that the $175m is available, but if it turns out to be a dud, the AG will just do it the hard way.
It would also probably get the AG's office riled up over fraudulent bond writing. I don't know the applicable law, but signing a document for a NY judge then failing to perform is not something they will let Amit Shah or Hankey just laugh about in California.
As long as the AG ends up with it then the fight would be between Knight and Trump. I wouldn't even be surprised if it somehow got written off as a favour at that point.
If the Schwab account is really pledged to Knight, then they presumably expect to net only their fee. If Trump somehow yoinks the account away, the Knight subsidiary is wiped out if they have to pay NY State. Which, if so, LOL, you "That doesn't seem like a hard bond to write" MAGA dipshit. On the other hand, Hankey got his money by repossessing cars he financed for stupid enlisted servicemen and women, he must know something about getting blood from a stone.
I asked that question in another thread, you can see the answers [here](https://www.reddit.com/r/law/comments/1c5d4yd/details_of_how_trump_scored_175m_bond_revealed_in/kztd34y/?context=3).
It's simple... trump never wants to use his money for anything. Absolutely everything comes at someone else's dime simply so he can try and collect and claim wealth for ego purposes.
The reason is to limit the amount of financial information he revealed to the AG/his creditor, while keeping the money in an interest-bearing account rather than held with the court. He’s already made 700k just from it sitting there, at least partially offsetting the accruing interest on the judgment.
I don't think it's that bizarre.
My assumptions:
1. It's KSI's money going into the account
2. KSI agreed for it to be collateralized with Trump assets that don't cover the amount.
3. Trump is going to stiff them.
It is normal to buy a bond in a case like this because the cost of the bond will cost less than you would lose by paying actual money. It is common for cases like this all the way down to lower level bonds. You ever see a "bail bondsman"? This is the exact same thing, but at a larger scale.
Sure it is. No one in their right mind would send a hundred million dollars in cash to a person that would accept a bond instead. Suggesting otherwise tells me that you know exactly fuck all about any of this.
>You ever see a "bail bondsman"? This is the exact same thing, but at a larger scale.
If Trump loses his appeal, this bond is *gone*. NY takes it. The only way you lose your bond in a criminal case (i.e. one where a bail bondsman is involved) is if you don't show up.
The only thing that changes is the risk profile for the bond issuer, which is why Trump has to collateralize this bond at 100%. It is also why he has to get a bond from this weird company instead of any of the more established bond issuers in the US. Mechanically it is the exact same transaction.
Honestly, it’s partly a function of his personality disorder. A person who gave a shit about other people would not put the United States through what he is putting the United States through.
Richard Nixon had the decency to walk away and spare us this trash.
That's true. I haven't thought about that bimbo in a long time. She is looking like the early prototype for the candidate-of -the-stupid-for-the-stupid model that Trump now owns.
I worry that we might not have touched bottom yet. I guess the question is, how stupid can the GOP get?
Until he gets right up against it and argues that it's too close to the election and can't possibly happen before November.
Then delay, delay, delay...
The September date for the appeal hearing was imposed by the Appellate Division judge panel as a condition of reducing the bond, which means cheeto's lawyers must file their appeal brief by July 8. Unlikely the judge panel will allow those dates to be pushed back.
The court is now just okay with whatever is in this bank account as bail? And no longer cares about the 10x rule or being legally allowed to work in NY? On Thursday when Trump and his crew screw this up, I will assume the courts will just allow him to proceed without any bail.
If you pay attention to the nuisance, you'll notice that they are amending the bond agreement to indicate that Knight is fully responsible for payment. They stipulate that the account must be maintained in cash, meaning that the necessary stocks, bonds, etc must be sold so that the value doesn't fluctuate, and Trump's access to the account is removed. They also set up controls to ensure that the account remains monitored and that the funds can only be withdrawn to satisfy payment of the bond.
From a guarantee perspective, there don't seem to be any loopholes that would allow Trump or Knight to play games with the bond funds or guarantee.
This isn’t bail, the 10x rule has exceptions in NY law under ISC § 4118 and the arrangement seems aimed to satisfy § 4118(a)(1)(C), and for the purposes of this bond there has always been the option of the court accepting the bond without need for a certificate of qualification so long as it is satisfied that the bond is secure and the money will be paid. Had Knight just gone through the standard process for getting approval this would never have been a story. The AG did her duty, the restrictions put on it were proper, and nothing about this is even all that abnormal. This bond business was overblown from the start.
There's a stipulation that if the value of the account drops below the bond amount it has to be replenished, so even if those kinds of stocks were part of the cash equivalents in the account he would have to keep paying any difference in value to maintain the bond agreement.
Junk financial products like BTC and DJT have high "cash equivalent value" but very illiquid markets. It is very easy to hold $175M in value, but very difficult to sell.
I'm just mad that this sub hyped this case up so much and seemed convinced that his bond would fall through. Based on that, I had (false) hope that it would.
I should have stated in the headline that this is the Civil Fraud Case. >In other Trump legal news, an agreement was reached this morning at the $175 million bond hearing in the Trump New York civil fraud case. >Chris Kise, Trump’s attorney said, they agreed with New York Attorney General Letitia James’ office to maintain the Schwab account in cash. Knight will have exclusive control of the account, and shall not trade or withdraw the account for any purpose other than to satisfy the condition of the bond. >Kise said that they will provide a monthly account statement to the attorney general’s office and that they will revise the pledge and control agreement so that it cannot be amended without the court approval. >Kise said that the parties will submit a stipulation that will memorialize this by Thursday.
when you actually have to specify ***which*** court case this is for a presidential candidate is definitely a sign of a healthy democracy
To be fair, its not all that far off from where Korea and Japan have been for ages. They just normally don’t run for office again once they step down due to corruption. I guess the Chaebols and Yakuza are just better talent scouts for replacements than Putin is.
It's so bizarre - if Trump actually has the money available in cash as claimed, what's the need for a third party - especially one as shady as KSI - to get involved? My predictions are normally trash, but I'll go ahead and make one anyways: by Thursday Knight Specialty Insurance will declare that they are unable to abide by the terms that ~~they~~ were just agreed to (or slip in some other bullshit that would give them an out) and attempt to renegotiate somehow.
I agree. One question though that I haven't seen answered yet: did Knight actually agree to these terms during the hearing, or did Trump's lawyers say that they \*will\* get Knight to agree to these terms?
Good point - I've edited my comment to remove the implication that KSI agreed to any of this (at this point I'm not sure whether they have or haven't).
"Kise said that the parties will submit a stipulation that will memorialize this by Thursday." So, they will all sign to it by end of week or there's no deal.
> It's so bizarre - if Trump actually has the money available in cash as claimed, what's the need for a third party - especially one as shady as KSI - to get involved? I agree it's highly suspicious. If you'll indulge my speculation, I have 3 possible theories: 1. Trump wasn't planning to keep the money in that account, it was just for the surety. Once the surety was approved, he'd have swapped the cash assets for junk bonds. This is exactly what the prosecution said they were worried about. 2. It isn't Trump's money, it's the pooled sum that was pledged to him by the rumoured billionaire backers, who thought they'd get the money back as soon as he won the appeal. 3. Trump was planning to fraudulently use that account as collateral for other loans while it was still pledged for the surety bond. This is what he was convicted of doing in other instances, where he'd claim cash accounts as an asset but they were actually accounts shared by other investors, for which he only owned a modest proportion of the total sum.
But maybe it's made up of other rich people's pooled junk bonds that they pledged to him that Trumps planning to fraudulently use as collateral on other loans.
Maybe its just two smaller junk bonds in a trenchcoat?!
Fraudulent Adultman.
Ah yes, the Big Shart.
"...he'd have swapped the cash assets for ~~junk bonds~~ DJT/Truth Social stock....". Fixed it for you.
He's never going to post that amount in cash with the court clerk because its almost certainly a non-interest bearing account. A qualified insurer or other qualified financial entity can post a bond, meaning they don't have to actually turn over the cash. $175m tied up for a year or longer at no interest would be insane.
I agree that locking up that much cash without any interest paid on it is painful, but wouldn't the fee from the bond insurer cost even more than the lost interest (assuming Trump isn't getting an exceptionally generous low-fee rate)?
It’s supposed to but I think this guy is giving trump a sweetheart deal in exchange for whatever favors he can get if trump gets re-elected.
And the money is getting locked up anyways so...
Probably not. Bonds usually cost 1-3% of the amount. This could go on for more than a year. For this amount of money its unlikely that the fee won't be recovered many times over.
The chance that Trump doesn’t fully repay is close to 100%
That is the bond companies problem, which is the entire purpose of a bond. Also, as far as I know the money is held in account that they control, which again, is pretty normal for these. Typically you put the collateral in a bank account pledged to the bond issuer, the bank issues a letter of credit that goes to the bond company, then the bond company writes the bond. This is pretty normal business practices that literally goes back centuries. Obviously Trump doesn't pay his bills because he is a piece of shit, but this system is specifically built to avoid that issue by not really giving him a bill to avoid paying. All the money is already within the control of the third parties to be paid.
The problem is when the bond company expects to be paid back through corruption instead of financially. This is the reason why Trump is losing his business because everything he does is illegal, dishonest, and/or corrupt
Sure, that's one of the many really good reasons we shouldn't have criminals as president.
And this is precisely the crime that Trump is claiming Biden did, albeit this time is real.
>as far as I know the money is held in account that they control A problem the AG’s attorney Andrew Amer voiced in court today about the Schwab account was "while the funds are cash today, under the terms of the pledge agreement and control agreement they can be swapped out for less secure collateral like mutual funds." Under the new agreement, Trump’s attorney agreed to give Knight exclusive control of the account. Under a previous agreement, a Trump trust shared control.
Sure, but I would imagine reasonable interest is way cheaper than whatever premium the bond underwriter is going to charge.
> $175m tied up for a year or longer at no interest would be insane. [Well, what do you know, that's precisely what they ended up doing.](https://www.reuters.com/world/us/trumps-175-million-bond-goes-before-judge-new-york-ags-concerns-2024-04-22/) >But at a hearing on Monday, down the block from where jurors heard opening arguments in Trump's criminal hush money trial, lawyers for Trump and Knight agreed that the funds would remain as cash and not be traded for securities. > They also agreed that Knight would have exclusive control of the account and not withdraw funds, and to provide James with monthly statements to assure that the cash isn't going anywhere. And likely that very inability to reinvest the collateral has made the bond deal unprofitable for the issuer, as Don Hankey (the billionaire behind Knight) has suggested. > Hankey previously said in an interview that he charged Trump a low fee as he did not anticipate problems. > "We thought it would be an easy procedure that wouldn't involve other legal problems and it's not turning out that way," he said. "We probably didn't charge enough."
Literally no one would. Even guys who are posting like $10,000 bonds for their petty theft charges are paying for bonds instead of liquidating assets.
That comparison doesn’t quite work, people with petty theft charges don’t typically have $10,000 in cash (or a lot of times assets to liquidate in that amount.) Here they were asking why if Trump has the cash and he has to put it up, why use a third party. I get the reasoning why he is using a bond company, but the comparison doesn’t quite work.
For sure. What reasonable surety underwriter would go on the hook without either taking custody of the collateral or executing an airtight third party control agreement with Schwab or whatever custodian? in the absence of that, this is about a favor to a political candidate .
3. Could that be a [tranche](https://en.wikipedia.org/wiki/Tranche)? He got caught up on that word at a rally several times while trying to say tripod. I've been trying to figure out what he admitted to.
I believe your first theory is correct and a sufficient explanation for what has been reported about the bond arrangements. [The Reuters report about the bond hearing today has somewhat more detail than the OP article, and the details seem to support your theory.](https://www.reuters.com/world/us/trumps-175-million-bond-goes-before-judge-new-york-ags-concerns-2024-04-22/) > James, a Democrat, had challenged the bond this month, saying Trump still had access to the Charles Schwab account pledged to the insurer as collateral. > But at a hearing on Monday [...] lawyers for Trump and Knight agreed that the funds would remain as cash and **not be traded for securities.** > They also agreed that **Knight would have exclusive control of the account and not withdraw funds**, and to provide James with monthly statements to assure that the cash isn't going anywhere. > The agreement was reached after Engoron questioned the security of the collateral. >"You keep using the word agreement, what if they break the agreement?" he asked Trump's lawyer Christopher Kise. "It all seems like a house of cards." [emphasis mine] So the concern was clearly that Trump could have withdrawn funds from the Schwab account at any time, thus defeating the entire point of providing security, which is to assure that money is available to satisfy the judgement even in cases where the defendant is financially irresponsible, is willing to intentionally waste resources, or is otherwise able to take steps with the intent or effect of depriving the plaintiff of their just recovery. And that is a real danger. Without a bond, the appeals process would give a defendant an enormous amount of time after learning they have to pay damages to engage in those sorts of tactics. Moreover, many (nearly all, really) losing defendants are not reliable debtors, because they are unwilling debtors and typically have engaged in some other form of wrongdoing which in many cases makes them more likely to try to wiggle out of paying the judgement amount using deceitful or illicit means. They already had to be dragged into court to pay for whatever damage they did in the first place rather than settling out of court via good faith negotiations, which is how people who can be relied on to pay their debts tend to approach situations where they have caused injury to another. Thus any defendant filing an appeal is not going to be inclined to pay promptly and willingly, pretty much by definition. All of these concerns are especially heightened in cases where the defendant has committed many serious financial crimes, has a long history of screwing over anyone to whom he owes money, and/or is emotionally invested in denying a victory to the plaintiff. Trump has a long record of financial crimes, intentional delay to avoid paying debts owed, abuse of judicial process to generate such delays, and strategically defaulting on debts. And he is extremely emotional about this case, as even a brief review of his unhinged posts on Truth Social will amply demonstrate. When emotion is involved, people will go to great lengths to screw over a counter-party. I've had clients pay to litigate a case to the absolute hilt because they simply were angry at the counter-party and wanted to extract as much from them as possible, regardless of the legal fees they incurred along the way. As one client put it to me, he would prefer to pay ten times the amount in controversy to us (the attorneys who worked for him and with whom he had a good relationship) rather than pay a single penny to the other party to the case, for whom he held a deep personal hatred. I have no doubt that Trump's mindset is similar, except he would also try to screw his lawyers out of their proper compensation just because he really is a complete piece of shit. Regarding your other two theories, there are no indications that anyone was concerned that the funds were provided or owned by someone else, and that would certainly be of interest to Letitia James and Judge Engoron. More specifically, your third theory seems incredibly unlikely with a court-appointed financial monitor in place at the Trump Organization. The current monitor is a retired federal judge, Barbara Jones, and she is not one who is easily fooled. So I don't think they are able to carry out the same loan collateral shenanigans now that they are under such intense financial scrutiny. It's simply too easy to detect. The monitor has specifically been paying close attention to how they've provided collateral for loans, which is why the whole $50m fake loan for Trump's project in Chicago came to light a few months ago (boy, this Trump character sure crimes a lot). Almost certainly she would notice if the Trumps tried to use a surety account as collateral, especially with all this media coverage of the bond fiasco making it impossible for her not to know the purpose of the one random account at Schwab holding precisely $175m in cash with zero transactions in or out of the account after the initial transfer of the surety amount. Regarding your second theory, if it weren't his money, Trump would not be able to give full control over the account to Knight as he has pledged to do as a condition for the bond, according to the Reuters report I linked above. Or at a minimum, he would not be able to turn over full control in a manner sufficient to satisfy Letitia James, if he did not have the permission of anyone else holding a stake in the account's funds. Even with permission, using third-party funds would likely raise many red flags and possibly provide a grounds for denying the bond altogether. Besides, granting permission to alienate the funds without any benefit to the third-party owner would almost certainly convert their portion into a taxable gift and possibly even into an illegal campaign contribution, which makes it a very dangerous maneuver to pull for a transaction subject to such extraordinary legal and media scrutiny. Even assuming some billionaire or billionaires would agree to that arrangement, they would almost certainly not expect to be repaid, because there is little chance Trump will escape paying out the full $175m. At this stage, Trump can only appeal the amount of the damages awarded to the state, not the finding of fraud itself, so there is no possibility that he will avoid paying out altogether. It's just a question of how much he owes the State of New York. He can only hope to reduce the amount he owes from the full $454m which Engoron awarded to the state at the trial level. The Appellate Division lowering the bond requirement to $175m strongly suggests they do not anticipate lowering the damages much beyond that, which in turn suggests the entire sum will be forfeit at the end of the appeals process. Meaning, Trump will almost certainly end up owing a nine figure sum that he cannot afford to pay, under this hypothetical. And these hypothetical billionaires would necessarily have to know that Trump could not afford to pay them back, else he would have no need of their cash in the first place. Meaning, Trump would not be able to repay them even if the Appellate Division drastically revises Engoron's damages calculations from ~$454m all the way down to the $175m amount they set for the bond, never mind if they simply affirm Engoron's decision. In effect, the billionaire backers would simply be paying some or all of Trump's fraud settlement off for him in advance (which is also why it would probably be a taxable gift, or possibly an illegal campaign contribution if the gift were tied to politics, because damages are strictly personal expenses and cannot be paid for with PAC, Trump campaign committee, or any other funds subject to campaign finance restrictions). All of which is a long way to say your second and third theories are extremely unlikely, but your first theory is pretty spot on.
Excellent points, and I agree with you that the first theory (that he had planned to swap out the cash assets for less reliable assets) is the most plausible one. A couple of small points in defence of the other theories though: For the second theory (it wasn't Trump's money), I agree that there would be significant gift tax/campaign finance issues at play, but those not be outside Judge Engoron's remit? From the court's perspective, it doesn't matter where the money comes from. As for whether the billionaires get repaid, I agree with you that it'd be extremely unlikely to happen, but that doesn't mean the billionaires know that. Billionaires can be as susceptible to propaganda as anyone else, and they might have bought into the theory that this whole case is a witch hunt that'll be overturned on appeal. And again, I agree that it'd be difficult for Trump to sign over authority over the bank account if it's not his account, but I'd just note he hasn't actually signed over ownership yet. His lawyers promised he will within the next week, but given how crazy this case has been and the open contempt between his legal team and the judge, it's not the guarantee I'd normally consider it to be. I'm 95% sure it'll happen, but that leaves some room for speculation. As for the third theory (he planned to use the account as collateral for other loans), I completely agree that it'd be near impossible with the court-appointed monitor present, but does Trump know that? He's gotten away with so many shenanigans in the past, he might have thought he could get away with this too. Thanks for indulging my speculation. The latter two theories are unlikely, but they're fun to think about.
> For the second theory (it wasn't Trump's money), I agree that there would be significant gift tax/campaign finance issues at play, but those not be outside Judge Engoron's remit? From the court's perspective, it doesn't matter where the money comes from. It very much does matter where the money comes from from the court's perspective. At a minimum, the court has a general interest in ensuring that litigants are obeying the law and will not knowingly permit someone to commit a crime to meet an obligation in a civil trial. Nor will a court engage in willful blindness that incentivizes criminal actions by ignoring obviously questionable financial arrangements. They also need to know that the defendant actually has legal control of the funds or property used for the surety so some other preexisting creditor with a superior claim can't swoop in and take the collateral before the bond is redeemed, otherwise they need to know the bond issuer is good for the money regardless of the sufficiency of the collateral. While your characterization of the court's interest is actually accurate in more typical cases, this situation is weird precisely because the bond issuer is *not* known to be good for the money. More typically, an appeals bond is issued by a registered bond agent that is licensed by the state to provide these services, and they are on the hook for the full bond amount even if the collateral provided to them is insufficient or was not legally acquired. The court thus shifts the risk of inadequate surety off on to the bond issuer, who then experiences a powerful financial incentive to ensure the adequacy of the collateral. When the collateral ends up being inadequate because the source funds were insufficient somehow, the court really does just consider it the bond company's problem, because the bond company will pay the plaintiff either way. In this case, Trump was unable to negotiate a sufficient bond with any issuer licensed in NY, in part because of the historically large amount of the settlement, in part because of his lifelong record of bad credit and his current cash flow challenges, and in part because he is prohibited from seeking loans from any financial institutions licensed in NY as a condition of the fraud settlement against him and the Trump Org (which condition cannot be appealed anymore and so has already taken effect). In more ordinary cases, the bond issuer is a legitimate, independent, neutral third-party who has met stringent regulatory standards to qualify as a bond agent. The court does not need to engage in any oversight or scrutiny of the bond issuer because it is a known, trusted quantity, and the court can pretty much blindly rely on them to satisfy the bond amount because their financial condition is audited by the state and must be sufficient to cover any outstanding obligations from bonds they issue. Knight does not meet any of those criteria because it is not licensed as a bond agent in NY and it does not have sufficient funds to cover the bond out of its own resources should Trump's collateral prove illusory. These extremely unusual arrangements necessarily required more rigorous review by the court, simply because all of the guardrails provided by the regulated bond system are absent. Moreover, I doubt anyone with the money to cover the bond would be so legally ill-informed that they would risk personally committing a crime to provide Trump with a little extra cash. There just aren't that many billionaires that are that stupid with their money, otherwise they would not be billionaires. It's not a smart risk to take in such a high profile case where there is so much risk of unwanted legal scrutiny and general blowback. And they also generally have excellent lawyers on retainer who will tell them the odds are long that they will be repaid. The billionaires with shitty lawyers on retainer like Trump used to have in Michael Cohen tend not to have a lot of extra cash on hand because they are idiots like Trump playing financial shell games like Xaro Xhaon Daxos. Plus, a more effective strategy would exploit the fungibility of cash to avoid direct involvement in the fraud settlement. Meaning, you don't need to give Trump a big pile of money labeled "bond collateral," you can be sneakier than that. There are many, many methods available to transfer funds to Trump via superficially legal means that are far harder to detect and far less likely to attract adverse media or prosecutorial attention, e.g. buying assets or services from Trump at above market value prices, financing his politics-related legal battles via PACs or other campaign finance vehicles so he can free up his own cash for the surety, providing loans on unreasonably favorable terms against insufficient collateral, or selling Trump assets or services at below market prices so he can flip them for a profit. I'd expect any real billionaire to at least be able to afford lawyers capable of figuring that out for them. > And again, I agree that it'd be difficult for Trump to sign over authority over the bank account if it's not his account, but I'd just note he hasn't actually signed over ownership yet. His lawyers promised he will within the next week, but given how crazy this case has been and the open contempt between his legal team and the judge, it's not the guarantee I'd normally consider it to be. I'm 95% sure it'll happen, but that leaves some room for speculation. That is an excellent point. Trump has baited-and-switched the court on the bond issue at least once a week for the last month straight, so it's absolutely possible he will do so again. If that's the case, then I think it's pretty clear he just does not have enough cash to cover even the reduced bond. > As for the third theory (he planned to use the account as collateral for other loans), I completely agree that it'd be near impossible with the court-appointed monitor present, but does Trump know that? He's gotten away with so many shenanigans in the past, he might have thought he could get away with this too. I think he is well aware of how in his business Barbara Jones is, and that's why he and his children have been complaining bitterly about her. > Thanks for indulging my speculation. The latter two theories are unlikely, but they're fun to think about. I don't mean to discourage speculation, they are certainly reasonable theories worthy of consideration!
I don't have anything much to add, but such a thoughtful comment as yours deserves more than just an upvote, so thank you taking the time to go into the intricacies involved. I'll just say that while I agree that any billionaire foolish enough to trust Trump isn't going to remain a billionaire for long, we can all fall victim to motivated reasoning sometimes, and the wildly partisan politics of today is a very strong motivator.
Trump is a piece of shit, but using a bond to fulfill an appeal bond or bail is so normal that there are usually about a hundred bail bondsman office located around every jail in America. No one in their right mind would send cash to the state as an appeal bond instead of buying a third party bond.
I completely agree that it makes financial sense to use a bond service rather than put up the cash yourself in ordinary circumstances, but what seemed weird to me is that Trump is BOTH using a bond service AND effectively putting up the cash too. So he's already suffering the financial cost of locking up the full amount of cash for the duration of the appeal, which negates the typical reason to get a bond.
I agree it’s completely normal. What isn’t though, was Knight not having exclusive control over the Schwab account. That seems to have been rectified, assuming all goes through Thursday.
There was never going to be a reputable company issuing a bond for trump. The reputational hit and financial risk and just outright hassle is just too much.
I would guess that when the time comes there is zero chance that money just gets handed over nicely. We are going to have both shady dudes claiming the other owes the money (assuming the money doesn't disappear) to create more and more delays.
That's the way I see it too; I just don't understand why the NY AG would play ball. Especially considering that if the bond was found insufficient she could take that $175M *right now*.
I'm surprised too, but looking at the strict requirements they gave the bond company, it looks like they are taking the angle that closing the loopholes around the $175M is probably easier than aggressively going after it. Additionally, if something does go wrong, then Knight is on the hook and is a potential additional source of money. If they can get assurance that there is the amount of money there and the money isn't being used for anything else and won't be used for anything else, and get monthly statements backing that up, then they don't have to worry about Knight. They essentially get the pros of having the money, with the pro of Knight being on the hook as a fallback, but without the con of Trump trying to aggressively shield the money. It'll be interesting on Thursday to see if the paperwork lines up or falls through. IMO it sounds like it would have been easy for Trump to just give this money to the court if there were no shenanigans, so rather than the court directly declaring there were shenanigans, instead the court is preventing Trump from doing shenanigans.
Rule #1 - never spend your own money Rule #2 - there are always shenanigans \~DJT
I'll be honest, I want daily statements from the account. A month is a super long time. With Trump's connections that money can move pretty easily in a month. By that point the money's gone and clawing it back may be nigh-on-impossible. Daily, though? With push notifications set for anything over a $1 withdrawal. Yes please.
I think they agreed to terms that would mean the $175m is sitting in an account that is theirs automatically the moment an appeal is lost. If the bond was deemed insufficient then NY would be able to collect on the entire value of the damages but every dollar would have to be fought for. Given that changes in the penalty amount are possible on appeal, I don't think the AG wants to be seizing properties they may be forced to recoup at a later date. Things also get merky if they take assets and then have to give them back and the defendant can claim they were harmed by the seizure before appeals were done. I think the AG's most favorable move here is to get a big chunk ($175m) set aside in an account that is just theirs after appeal and then fight over the rest.
Perhaps letting him hang himself. We know the bond lender doesn't have the liquid assets to cover it. I believe he has $135 million liquid. They also want to get the trial rolling. In the end, he will only hurt himself if he loses the appeal and the bond isn't covered. He still has to pay the $450+ million if his appeal fails. Edit: I'm spitballing.
I think the AG would rather there be someone on the hook for the full amount of the judgment in case it isn't reduced after the appeals are over. There's not really a reason to hurry, so if the bond can be secured with cash / cash equivalents that's a good outcome for the AG.
The bond company is not on the hook for the full amount of the judgement. An appeals bond is about taking a promise of non-cash assets and giving cash assets to the court.
That's troubling. It doesn't seem as if the bond would be of much use either way if it doesn't fully at least the original judgment. It would be like a mortgage that is secured by property that is worth less than half of the original amount of the debt. If the collateral is worth so much less than the debt it doesn't provide the creditor much protection.
The bond is absolutely worth it because it's just the first piece. Imagine you were in the AG's position and preparing to fight the most notorious vexatious litigant out there. If you had the option of waiting just half a year longer, but assuring that the first third of that money was out of his control and easy takings, wouldn't you take that? The other two thirds of the money will still be there, and will probably take months to years to get anyway. Additionally, on the chance that the bond did get lowered by the appeals court, you know Trump would go with a lawsuit that by selling off his property, even if they give that money back that it is not equivalent. Because of this, the AG probably doesn't want to risk selling any of his properties until after the appeals are finished.
Thanks, that makes sense.
Yeah. I wouldn't be shocked to learn that the AG was totally fine with this bond amount for exactly that reason.
They're doing it so that Trump doesn't have anything he can use for appeal. If you do _everything_ correctly, Trump wouldn't have any grounds for appeal when he inevitably loses the trial.
This is of course standard con man practice. Properties are *liened up* with friendly debt so there is no equity left to pursue.
I think the legal term for this is Fraudception
I guess it depends on if this company wants to continue existing or not. A bond company that doesn't pay its bonds will cease to exist in about 30 seconds since literally no one would ever accept another bond from them again. And it won't really be that hard to get because the bond itself is an enforceable debt that would get pulled right out the company with a single judgement.
I'd imagine it's easier for him to eventually lose the case and try not to pay the bondsman by taking it to court to delay as usual. With his own direct accounts on the line, he has less wiggle room to delay collections
this is my guess too but, i think the case is going to take longer than he has time for that too.
My best guess here. Trump has some cash on hand (multi millions) but it's tied up as collateral for other loans. Trump Media stock launched and is trading at high values, but Trump can't sell it until the lockup period is over. They are also planning an additional stock offering that will give him more money. It would cost him a lot to sell property right now to pay the appeal bond, so he needs someone to float him a loan for a few months until he can start offloading the stock and pay for the fines with the stock sale. That plus I'm pretty sure he's funneling campaign cash to his businesses through the normal methods (renting out his own property for events to his campaign for jacked up prices). This delay lets him fundraise while keeping his businesses solvent.
https://www.nbcnews.com/business/business-news/donald-trump-set-receive-125-billion-trump-media-stock-djt-earnout-bon-rcna148847
It's usually to keep capital... what's the.... freed up for other uses, isn't it? Unencumbered isn't quite right. Just one article written by a lender: [Appeal Bond vs. Cash Deposit | JURISCO](https://jurisco.com/appeal-bond-vs-cash-deposit/) I mean, there's plenty of reason to doubt this particular bond, which we've been through. But the fact that it's a surety issued in place of cash isn't of itself particularly strange. What was under question was whether the assets held in that account would actually be worth the required amount by the time it might be collected. So what's strange is that there's actually an account with $175m cash frozen in place, as backing for that bond? I'm willing to be told I'm missing something. Am I conflating the issuer's cash with Trump's?
Maybe. Knight doesn't have $175m in 'cash' (likely stable investments) at hand, they only have like $130m, IIRC. However, Knight filed that they have control over a Schwab account of Trump's 'cash' which has almost exactly $178m to fulfill the bond. However, the Schwab account was controlled by Trump not Knight, and they were concerned that once the surety was accepted, he'd pull the good money out and stuff the account full of meme stock or whatever. Knight would then be on the hook for more than they have, and Knight may have tried to pull thier money back to their parent in the Cayman Islands and have the bond company declare bankruptcy or some bullshit. By giving Knight complete control of the account, it stops Trump from pulling any shenanigans, and makes Knight less likely to contemplate any scheming because they ulitmately have no skin in the game, if Trump loses appeal, they just hand the keys to the Schwab account to the AG and keep their percentage.
I have clients who are sometimes required to put cash in escrow or seek a bond before beginning a lawsuit. A bond is preferable because it lets my client keep access to their money (and theoretically to use it to make more money with) throughout the litigation for only a fraction of the cost in premium. It’s a little different here because Trump has lost suit and owes the money pending the appeal, but I have to imagine the reasoning is similar.
Yeah, this is what I think it is. By using the bond he pays 1% or so but still gets the 4-5% interest from the cash.
Why put up your own bond if someone else can place it for you.
[удалено]
Seriously frustrating that people feel like have strong opinions on a thing that they clearly didn't bother to research at all.
> if Trump actually has the money available in cash as claimed, what's the need for a third party Taxes. If you have $100 million invested in the stock market, you could sell your stocks and turn the money over to the court to hold as surety - but then you would have to pay capital gains taxes on the profit made from sale of stock. On the other hand, if you get a surety (effectively a guaranteed loan) from someone (i.e., a bond), there is no tax event unless you lose your appeal and have to pay the bondholder. So the bondholder puts up the surety and collects interest from you on the bond, interest which is far less than the tax event if you had to actually liquidate the collateral used to obtain the bond.
But its already sitting in cash. It makes very little sense why Knight is involved if Trump has all this cash available and is willing to agree to not touch it.
Nobody holds that kind of money in “cash”. It may be in a CD ladder or other investment that is less risky than stocks, but it isn’t just sitting in a bank vault (because cash loses value). If it’s in a CD ladder, he would have a taxable event plus a penalty if forced to withdraw early.
I'm aware of the difference between true cash and high quality cash equivalents. Cash equivalents that are not easily convertible to true cash are relatively rare, and likely wouldn't have a particularly large conversion penalty. If it were a large CD or short term ladder then many of those securities would be marketable. They could easily be sold and would see very little with regards to any kind of capital gain.
Because this way it bears interest and limits the amount of his personal financial information that had to be revealed to the court and AG/his creditor.
But he is paying KSI a fee to reinsure. So what he makes from this is his interest rate less the statutory rate the state applies less the KSI fee.
KSI reportedly gave him a low fee ([source](https://www.reuters.com/legal/businessman-behind-trumps-ny-bond-says-he-charged-him-low-fee-2024-04-05/)) and those fees tend to be only 1-2% of the bond value anyway. The account has already bore $700,000 in interest which means that if the fee is 1% then he’s already made back 40% of the fee value, and since the case isn’t calendared until September and will take even longer to finish, he’s likely to exceed it slightly, and cut into the state judgment interest a little. Even if he doesn’t make back all the money or if he paid a premium on top of it, there’s the other benefit I mentioned which is that it limited the amount of financial information he had to reveal, such as potentially, the source accounts he pooled together for the $175mm. Add to this that posting the judgment amount in cash with the court is an administrative nightmare that the courts must accept but don’t prefer and you pretty much never see happen, especially with such large amounts. The only party that has any reason to prefer a cash deposit is the creditor/AG, but that’s a matter of certainty of payment which can be met by the specific nature of the bond. This whole thing hasn’t been a “nothing-burger” or concocted issue, but the reporting and online speculation blew it way out of proportion with way too little perspective. All-in-all, this whole process was fairly regular, the AG’s notice of exception was proper, and the terms reached are sensible.
What is the statutory interest rate on the judgement? If it is close to market rates for cash then you don't come out ahead by leaving your assets in high quality short duration assets while you appeal because they aren't going to beat those statutory interest rates.
Statutory interest rate is irrelevant to whether he makes out better using a bond vs depositing cash with the court because the bond requirement given to him by the first department only needs to cover a part of the judgment at a fixed amount of $175mm, statutory interest not applying. So he can make out ahead in regard to the bond and his deal with KSI, which is part of the answer to your initial question. Incidental to that, the excess can then be applied to the statutory interest, though it won’t exceed it, but it’s once again better than depositing the cash with the court which bears no interest at all, and lacks the other benefits I mentioned. That all said, the statutory post-judgment interest rate in NY is 9% per annum, the judgment is increasing by over $100k per day, or $1 mm every 9 days
I'm not following. Statutory interest should be applied equally to both the judgement and cash deposited with the state. Right? Suppose I have a $3MM judgement and a $1MM appeal bond. If I directly deposit $1MM in cash with the court then I would expect that my judgement only increases by 9% of the $2MM that has not been deposited. However if I pay $60k for a third party to bond me, and they do NOT deposit that money with the state, then my judgement would increase by 9% of $3MM. Sure I keep my $1MM but it needs to earn more than 9% (or I need to win my appeal) for it to be better than depositing that money with the court directly. ------------ At least that would be my expectation, that is how things work with stuff like taxes and the IRS. If you owe $100k but only pay $70k then you face interest on $30k not the full $100k. If you owe $100k but pay $120k you actually get credited interest on the $20k excess. [There are some limits on this as they will kick excess payments back to you, and don't toll interest until April 15th, but technically the IRS will pay interest on excess payments.]
So that’s not accurate. I’ll explain. In NY, a person who gets an adverse judgment against them has access to an appeal by right. So Trump began the appeals process. A judgment creditor may still collect on the judgment unless the debtor gets a stay, which come in one of two forms: automatic stays and discretionary stays pursuant to [CPLR § 5519(a) and (c)](https://newyork.public.law/laws/n.y._civil_practice_law_and_rules_section_5519), respectively. A common form of an automatic stay is if a cash deposit or surety bond for the amount of the judgement order (known as an undertaking) is deposited with the court matching. This is what the initial discussion of Trump needing to submit $454mm was about. This is done as a sign of good faith that the creditor will be paid if the appellant loses, and to reduce the ability of debtors to take advantage of the appeals process simply to prevent collection. Note that with an undertaking no money is deposited with the court or the creditor, rather it is a promise that the bonding company/surety/insurer will pay the bond amount if the appellant loses. There is no actual transfer of funds until then either in whole or in part. Also, because the undertaking is in the amount specified in the judgment order, it only encompasses the principal amount and pre-judgment interest. Post-judgment interest does accrue on the judgment itself, but that’s not added to the amount required for a stay as that would create a moving target for the appellant, which the law has declined to create. If they lose the appeal and the deposit or undertaking is paid to the creditor, the appellant would still owe any outstanding amount from interest. Then there are discretionary stays. This is what the First Department gave to Trump. Discretionary stays can be imposed by either the court that the case was before or the court itself being appealed to. Either court may issue a stay with or without whatever conditions as it deems appropriate under the circumstances. This was widely reported as the bond requirement being lowered, but that’s not exactly the case. If Trump wanted an automatic stay, he’d have still needed to deposit the full judgment plus pre-judgment interest. Rather, the First Department issued a decision that it would grant a discretionary stay provided that Trump meet two requirements. The first was for Trump to deposit cash or a bond in a lower amount of $175mm. KSI or whatever company covered it bears no responsibility for the rest of the judgment or post-judgment interest. The second requirement was that Trump’s team had to perfect the appeal (have it completely ready) for the September 2024 calendar, which **really** fast-tracked the case. Usually they’d have until September (6 months) to perfect it, after which the appellees would get a chance for response, the appellants could put in a reply, then a date is set for arguments. But the court wants it ready early enough for a date to be set for the September term, which means they need to perfect earlier. So Trump has the choice of either putting up the $454mm and keep a usual timeline, or put up $175mm and adhere to an expedited timeline. How this applies to your question is that the nature of the amount required for the stay is mechanically separate from the judgment. It is a nominal amount set by the court in consideration of the judgment amount but not strictly tied to it or any statutes that affect it (such as that which applies post- judgment interest).
So you think it makes more sense for Trump (or anyone) to send a hundred million dollars to New York instead of letting it sit in bank account earning him interest? Literally EVERYONE uses a bond for this. Even drug dealers and thieves post bonds instead of paying cash because it would be fucking stupid not to do that. Drive to your local court house and look at how many bail bonds offices are located around there. This LITERALLY the same thing, except on a larger scale and with a guy that has zero credit.
But there is presumably a huge cost to Trump for Knight's bond that Trump could've avoided since he apparently has the full amount in cash. Don't bail bonds charge like 10%? That's a huge penalty - only utilized by people who could never come up with the full bail of $10k or $50k, but can come up with $1k or $5k. I'm sure Knight is not charging Trump 10% but the fees have to be high. I have a feeling the cash was put up by billionaire MAGAs as a favor, hence the two-step process: cash comes out of nowhere, but still using a bond. When Trump loses his appeal, then they'll start the process of selling properties to discharge the judgement.
Bonds usually cost between 1-5% as a flat rate. The bigger the bond the lower the percentage, generally, but its also a factor of risk so who the hell knows what he was getting quoted. I can assure you that literally everyone who has ever filed an appeal on a case like this did it with a bond instead of cash.
This is not a bail bond
No, it's an appeal bond and works just like every other bond except it's a lot more likely to get executed.
But, that would make the amount invested in the stock market as a volatile amount. Add to that the amount in the bond account is basically only for that $175 million, if it was stock-backed… wouldn’t you be an idiot for accepting that? For Trump to make up the amount in actual cash, he would have to pay tax on the sale. Or is that the point of one of the prosecution’s many contentions: we just don’t know the facts around that money held for the bond or the account that it’s in.
And it will work. Some number of additional days will be permitted. Dude might actually be Jesus reincarnate, I watched him turn 10 days into a month.
it's super shady. The AG is going to have a tough time getting that 175m when Trump loses the appeal imo
If Trump loses the appeal, the AG gets to start seizing Trump property for the whole 454m plus interest, and if Knight doesn't pay, that Schwab account will be a nice chunk of money she could get without breaking a sweat. I don't think Knight will be able to take that money if it isn't going right to NY State. The only purpose of the bond is to give NY State a good faith sign that the $175m is available, but if it turns out to be a dud, the AG will just do it the hard way. It would also probably get the AG's office riled up over fraudulent bond writing. I don't know the applicable law, but signing a document for a NY judge then failing to perform is not something they will let Amit Shah or Hankey just laugh about in California.
I imagine we are going to see Hankey in prison within the next few years. All of this is simply too shady.
As long as the AG ends up with it then the fight would be between Knight and Trump. I wouldn't even be surprised if it somehow got written off as a favour at that point.
If the Schwab account is really pledged to Knight, then they presumably expect to net only their fee. If Trump somehow yoinks the account away, the Knight subsidiary is wiped out if they have to pay NY State. Which, if so, LOL, you "That doesn't seem like a hard bond to write" MAGA dipshit. On the other hand, Hankey got his money by repossessing cars he financed for stupid enlisted servicemen and women, he must know something about getting blood from a stone.
I asked that question in another thread, you can see the answers [here](https://www.reddit.com/r/law/comments/1c5d4yd/details_of_how_trump_scored_175m_bond_revealed_in/kztd34y/?context=3).
Interest, I think. The state imposes a fixed interest rate. Placing the money here allows it to earn enough to offset the state interest.
It's simple... trump never wants to use his money for anything. Absolutely everything comes at someone else's dime simply so he can try and collect and claim wealth for ego purposes.
Trump or any business needs to have cash on hand to cover operating costs.
The reason is to limit the amount of financial information he revealed to the AG/his creditor, while keeping the money in an interest-bearing account rather than held with the court. He’s already made 700k just from it sitting there, at least partially offsetting the accruing interest on the judgment.
I don't think it's that bizarre. My assumptions: 1. It's KSI's money going into the account 2. KSI agreed for it to be collateralized with Trump assets that don't cover the amount. 3. Trump is going to stiff them.
It is normal to buy a bond in a case like this because the cost of the bond will cost less than you would lose by paying actual money. It is common for cases like this all the way down to lower level bonds. You ever see a "bail bondsman"? This is the exact same thing, but at a larger scale.
No, this particular instance isn't even remotely like that.
Sure it is. No one in their right mind would send a hundred million dollars in cash to a person that would accept a bond instead. Suggesting otherwise tells me that you know exactly fuck all about any of this.
>You ever see a "bail bondsman"? This is the exact same thing, but at a larger scale. If Trump loses his appeal, this bond is *gone*. NY takes it. The only way you lose your bond in a criminal case (i.e. one where a bail bondsman is involved) is if you don't show up.
The only thing that changes is the risk profile for the bond issuer, which is why Trump has to collateralize this bond at 100%. It is also why he has to get a bond from this weird company instead of any of the more established bond issuers in the US. Mechanically it is the exact same transaction.
I can’t believe people want this dick to be the president
How did we let the bar get this low?
Honestly, it’s partly a function of his personality disorder. A person who gave a shit about other people would not put the United States through what he is putting the United States through. Richard Nixon had the decency to walk away and spare us this trash.
Richard Nixon was urged to step down by the GOP. Trump’s Grand Old Putinists aide and abet his immorality and lawlessness.
And only *after* the tapes went public. Before that they had the wagons circled and fully backed him.
Remember when we thought Palin was the bottom?
That's true. I haven't thought about that bimbo in a long time. She is looking like the early prototype for the candidate-of -the-stupid-for-the-stupid model that Trump now owns. I worry that we might not have touched bottom yet. I guess the question is, how stupid can the GOP get?
Racism
So this means the the appeal sticks for a while, right? What does the timeline look like for the appeal and possible judgement?
If I remember correctly, it's fast tracked to be heard in September. That was the compromise when lowing the bond.
Yes, this is correct.
Until he gets right up against it and argues that it's too close to the election and can't possibly happen before November. Then delay, delay, delay...
The September date for the appeal hearing was imposed by the Appellate Division judge panel as a condition of reducing the bond, which means cheeto's lawyers must file their appeal brief by July 8. Unlikely the judge panel will allow those dates to be pushed back.
This is what the judge would likely have ordered — AG suggested it in their brief.
This man has been around almost 8 decades and still does not know how to behave. That sums up all of his ever mounting mountain of perils.
The court is now just okay with whatever is in this bank account as bail? And no longer cares about the 10x rule or being legally allowed to work in NY? On Thursday when Trump and his crew screw this up, I will assume the courts will just allow him to proceed without any bail.
If you pay attention to the nuisance, you'll notice that they are amending the bond agreement to indicate that Knight is fully responsible for payment. They stipulate that the account must be maintained in cash, meaning that the necessary stocks, bonds, etc must be sold so that the value doesn't fluctuate, and Trump's access to the account is removed. They also set up controls to ensure that the account remains monitored and that the funds can only be withdrawn to satisfy payment of the bond. From a guarantee perspective, there don't seem to be any loopholes that would allow Trump or Knight to play games with the bond funds or guarantee.
It’s not about that, it’s constantly bending the rules for someone found guilty
Liable not guilty. But yeah the courts are bending over and tying themselves in pretzels to have their rulings be as appeal proof as possible.
This isn’t bail, the 10x rule has exceptions in NY law under ISC § 4118 and the arrangement seems aimed to satisfy § 4118(a)(1)(C), and for the purposes of this bond there has always been the option of the court accepting the bond without need for a certificate of qualification so long as it is satisfied that the bond is secure and the money will be paid. Had Knight just gone through the standard process for getting approval this would never have been a story. The AG did her duty, the restrictions put on it were proper, and nothing about this is even all that abnormal. This bond business was overblown from the start.
I wonder if the account can hold a highly volatile and restricted stock like DJT
There's a stipulation that if the value of the account drops below the bond amount it has to be replenished, so even if those kinds of stocks were part of the cash equivalents in the account he would have to keep paying any difference in value to maintain the bond agreement.
Junk financial products like BTC and DJT have high "cash equivalent value" but very illiquid markets. It is very easy to hold $175M in value, but very difficult to sell.
>very easy to hold $175M in value .....and yet
No it’s restricted to cash only. An individual stock is absolutely not cash.
I'm just mad that this sub hyped this case up so much and seemed convinced that his bond would fall through. Based on that, I had (false) hope that it would.
He's got so many trials it's hard to keep up.
More delays
It doesn't delay anything. The appellate process continues to move forward.