Donald Trump is just days away from getting slammed with a court judgment that could be worth hundreds of millions of dollars as a punishment for his decades of bank fraud with the Trump Organization. And two little-known New York laws could leave Trump scrambling for cash: a requirement that he immediately front the money to appeal the decision, and a sky-high state interest rate.
During a deposition with the New York Attorney General in April 2023, Trump boasted that he had $400 million in cash, bragging about how it’s “a lot for a developer.” But even if that were true, it likely won’t be enough to simultaneously cover last month’s $83 million verdict at his rape defamation trial—which he needs to immediately set aside to appeal that case—and the $370 million demanded by the AG for his incessant lying to banks.
While the judge deciding the bank fraud case hasn’t come up with a final figure that Trump owes, every indication is that it will be into the hundreds of millions. A message from the judge on Tuesday actually suggested it could be even more than what the New York AG is seeking.
Trump’s sudden cash demands are exacerbated by a quirk in New York law. Not only would the judgment get automatically inflated by an unusually high interest rate of 9 percent, but Trump would need to give the court the enlarged total—plus an extra 10 to 20 percent—in order to appeal and have another day in court. And it would all be due by mid-March.
The self-proclaimed billionaire real estate tycoon is about to be caught in a trap of his own making, forced to front a massive amount of cash and possibly liquidate assets—while potentially unable to access the money, because the court order could limit his ability to tap his Monopoly board of properties.
Meanwhile, Trump also faces mounting difficulty in finding surety companies and banks to guide him through the appeal, because his credibility is the very focal point of the case in question. (Trump also has a long history of stiffing banks and creditors.)
“It’s not often that there are cases like this where the person’s financial ability to pay is really in question,” said N. Alex Hanley, an expert in how companies appeal enormous judgments.
“The subject of the case is whether the values of his properties are what he says they are,” Hanley added. “He may have some trouble with that.”
Court-imposed nine-figure penalties almost universally involve the nation’s leading corporations, not an individual facing four criminal indictments that also threaten to put him in prison. Even as Trump cruises to the GOP presidential nomination, the situation could send potential lenders rushing for the exits, said Hanley, who runs the appellate surety agency Jurisco in Tallahassee, Florida.
Ironically, Trump’s position as the leading 2024 Republican candidate actually makes matters worse for him, experts said, because the way he used his four years in the White House to block civil cases make him a radioactive borrower. Trump hid behind the presidential seal and employed the Department of Justice to delay E. Jean Carroll’s rape defamation case against him for years—something that proved instructive for any potential lender now.
“Sureties require an indemnification agreement, a contract for the bond. Now a concern would be: How do you perfect an indemnity of the person that could be the next sitting president? How do you take that person to court?” asked Neil Pedersen, who runs an eponymous appellate bond agency in Manhattan.
If Trump ultimately exhausts his court appeals and definitively loses the case, no lender wants to be on the hook for hundreds of millions of dollars—and unable to knock on the borrower’s door while he’s in the Oval Office.
“These companies are pretty conservative by nature. They're not likely to get involved in something that they think will get dragged on for a long time—and potentially not get paid for it. This has never been done, so it's completely unprecedented,” Hanley said.
The miserable defense Trump’s lawyers put on at the recent three-month state trial all but guarantees he will be punished severely. Justice Arthur F. Engoron, who reviewed extensive evidence gathered by investigators, concluded before trial that Trump indeed committed bank fraud. Trump’s lead accounting expert failed to convince the judge otherwise, and recent allegations of perjury by a Trump Organization executive have only promised to worsen the situation.
Whatever the enormous judgment will be, the state-mandated 9 percent interest rate on the sum is likely to date back to the start of AG Letitia James’ investigation in 2018, which means Trump could be in the hole for nine-figures more. If the judgment against Trump is, for instance, $370 million, he would face an additional $33.3 million tacked on annually to the base amount of the original judgment. It’s simple interest, which means it only applies to the original judgment, but if the time period stretches back six years, Trump would automatically owe 54 percent more than whatever the judgment comes out to be. (In this hypothetical of $370 million with six years of interest, it’d be almost exactly $200 million more.)
If the judgment is that high, it would be financially devastating to Trump, even with buildings he claims are worth billions.
According to surety bond experts who operate in New York’s court system, that towering interest rate was set years ago during a booming economy and hasn’t come down. Although Gov. Kathy Hochul vastly reduced the money judgment interest rate on consumer debts for the first time in 40 years in 2021, experts said the nature of Trump’s bank fraud case means he wouldn’t be spared.
Then there’s the matter of Trump’s inevitable appeal. The $315 filing fee will be the least of his worries. According to New York state court rules, Trump will have only a month to front a massive appellate bond worth anywhere from 110 percent to 120 percent of the judgment. Experts who spoke to The Daily Beast said Trump has two options: pay it directly to the court system, or find a surety company that would provide the state a guarantee on his behalf.
For Trump, either situation is a nightmare.
If Trump wants to take the odd route and fly solo, Pedersen said, the former president would likely be forced to funnel his cash reserves—if he even has enough—into a single bank account and cut the New York court system a certified check. But then he’d have to pay extra fees charged by the court for handling the transaction.
“It doesn’t go smoothly when the government holds your cash. I just hear horror stories,” Pedersen said.
If Trump opts to take the more common route, he’ll have to find a willing insurance company that’s licensed to handle these kinds of legal transactions in New York—and rely on one of the few that’s able to handle this kind of gargantuan sum.
That firm wouldn’t hand over the cash. Instead, it would merely present the court with an official document that says it’s good for the money. Trump, on the other hand, would have to pay the surety company a premium of maybe 1 percent—a tiny share that under present circumstances might translate into a whopping $5 million.
However, the bigger problem comes when Trump has to prove that he’s trustworthy—in the midst of a trial that proved he’s anything but.
“Appeal bonds always have to be collateralized. He would have to put up liquid collateral in the form of cash, a letter of credit from a bank, or a pledge of non-retirement account publicly traded securities,” Pedersen said.
Then there’s the risk of associating with Trump, Hanley added.
“In a divisive case like this, lots of companies would decline to be involved in it. The death threats. The pitchforks. I’ve had that happen in many cases that aren’t nearly as high-profile,” Hanley said.
Hanley said insurance companies “on the whole” don’t accept real property as collateral, as they prefer cash or letters of credit. As such, Justice Engoron’s order might force Trump to actually scramble to sell a building or prized golf course.
But that opens another can of worms. The incoming judicial order is also expected to give the AG some of the injunctive relief she requested, potentially ripping apart the Trump Organization and seizing its assets. That could put Trump’s own buildings outside of his reach, further complicating matters.
“Is he even allowed to use his assets to secure the bond? Because the corporation could be defunct. What if the court says you have to sell everything? The court can denude him of his assets… and those assets are the very thing he'd need as collateral,” said Evans D. Prieston, a criminal defense lawyer in Long Island City who has worked closely with the bail bond industry.
In other words, Trump might not be able to rely on tainted goods to pay off the punishment for having tainted goods.
Trump also has the unfortunate timing of having his bank fraud trial shortly after a case Prieston recently lost before the state’s appellate court in Brooklyn, one in which the court asserted that judges have extensive powers to intervene between a defendant and their bond lender. That case dealt with criminal matters, but Prieston said Justice Engoron could decide this kind of authority extends to civil cases as well.
Who would help Trump then?
“Depends on his friends and how much money he has,” Prieston said. “Jared Kushner knows Saudi Arabia. Who knows what’s going to happen?”