On borrowed dime
Trump on $454M hook, but judge OKs loan hunt
Donald Trump will be allowed to temporarily run the family company and apply for loans from Empire State banks to help post a bond to cover his $454 million civil fraud judgment — but will still be on the hook for paying the massive penalty, a New York appeals court found Wednesday.
A judge at the New York Appellate Division’s First Department granted the former president, 77, a partial and temporary pause of the penalties stemming from him being found liable for drastically inflating the value of his assets — but rejected his bid to stop the hefty monetary penalty from being enforced.
The ruling from Associate Justice Anil C. Singh came hours after Trump’s lawyers claimed that the judgment — which they called “exorbitant” and “punitive” — has made it “impossible” for him to secure a bond covering the $454 million he owes New York state.
Trump offered $100 million instead, which prompted New York Attorney General Letitia James to crow that the mogul has “insufficient liquid assets.”
Truth Social jackpot
But Trump could reap a windfall of as much as $4 billion from an upcoming merger tied to his social-media company.
Since Jan. 1, shares of Digital World Acquisition Corp., the “blank check” firm created solely for the purpose of acquiring the parent company that runs Trump’s Truth Social platform, Trump Media & Technology Group, have surged by a whopping 161%.
Earlier this month, the Securities and Exchange Commission approved the pending merger, which could be worth as much as $10 billion.
It is set to go to a shareholder vote on March 22.
If shareholders approve the deal, Trump’s stake could be valued at as much as $3.95 billion, according to filings showing that the former president would own around 79 million shares in the newly formed venture.
However, Trump would have to wait at least five months for the lock-up period to expire before dumping his TMTG shares, unless the company files to expedite that timing.
It’s also unlikely that Trump would be able to get a bank to lend him money against the locked-up shares, University of Florida finance professor Jay Ritter told Bloomberg.
Father and sons
The decision from Manhattan Supreme Court Justice Arthur Engoron had barred Trump and his two eldest sons, Donald Trump Jr. and Eric Trump, from getting a loan from an Empire State-based bank or running a New Yorkbased company for three years.
The appeals court decision also temporarily lifts the business ban against Trump’s sons. In all, the three family members and other defendants in the case owe more than $465 million to the state.
Trump’s camp did not immediately respond to a request for comment about how the judge’s ruling impacts whether they will post the full amount of the bond as they are required to do.
Typically, defendants in civil cases are required to post the full amount of the penalty they’ve been ordered to pay in cash — or in the form of a bond guaranteed by a third party — in order to pause enforcement of a judgment while they appeal.
But Trump’s lawyers claimed that “the exorbitant and punitive amount of the judgment coupled with an unlawful and unconstitutional blanket prohibition on lending transactions would make it impossible to secure and post a complete bond.”
James has vowed to ask a judge to seize Trump’s assets — including some of his prized Big Apple properties — if Trump fails to get the judgment stayed, and fails to cough up what he owes.
Engoron’s ruling also delivered a fresh financial blow to Trump just weeks after he was slapped with an $83.3 million jury verdict in his defamation damages case in Manhattan federal court.