Trump’s $454 million bond for New York fraud case is not unprecedented

Former President Donald Trump, facing a $454 million judgment in a New York business fraud case, called the amount "unprecedented, and practically impossible for any company." His attorneys said he has been unable to secure a bond to cover it. 

"A bond of the size set by the Democrat Club-controlled Judge, in Corrupt, Racist Letitia James’ unlawful Witch Hunt, is unConstitutional, un-American, unprecedented, and practically impossible for ANY Company, including one as successful as mine," Trump wrote March 18 on his Truth Social platform. "The Bonding Companies have never heard of such a bond, of this size, before, nor do they have the ability to post such a bond, even if they wanted to."

Trump is wrong in his characterization of the judgment’s relative size.

Experts said the judgment is high for a closely held, privately owned company such as the Trump Organization. But larger companies such as multinational corporations have paid for appeals bonds of $1 billion or more.

PolitiFact contacted Trump’s campaign for comment but didn’t receive a response by publication.

The judgment was issued in a civil fraud lawsuit filed by New York Attorney General Letitia James, who argued that the Trump Organization inflated the value of its assets to obtain more favorable loan and insurance terms.

When the state won the case in February, Judge Arthur Engoron ordered Trump to pay a nearly half-billion dollar judgment, including about $100 million in interest. (The total judgment comes to about $464 million when including the nearly $10 million Trump’s adult sons, Eric Trump and Donald Trump Jr., were ordered to pay). Trump has to post the cash or a bond by March 25, 30 days from the judgment entry.

The judgment calculation stemmed from two things: the court’s estimate of profits lost by lenders if Trump had accurately portrayed his properties’ value; and profits from the sale of two properties — Trump International Hotel in Washington, D.C., and a suburban New York City golf course — that the company might not have been able to develop without the financing it received.

Securing an appellate bond means a company vouches the penalty will eventually be paid if an appeals court upholds it. Bonds are typically backed with a mix of cash and assets for collateral equal to 110% of the total judgment, and are returned if the defendant wins on appeal.

In a March 18 court filing, Trump’s attorneys said that Trump had approached 30 companies through four brokers but failed to secure an appeal bond. The lawyers argued that companies are generally unable to guarantee bonds that large, and said the companies told Trump they can’t accept real estate as collateral. 

Lawyers for James’ office responded in a court filing that Trump has other options, including dividing the bonds among different companies or letting a court hold some of his real estate during appeal.

Trump’s attorneys haven’t said why the bond cannot be split between multiple companies, or if Trump has explored that option. James started the process of seizing some of Trump’s assets, filing a judgment March 21 in Westchester County, where his golf course and private estate Seven Springs are.

This judgment’s size is not unprecedented, according to examples provided by James’ office and an expert we contacted. A judgment that big is more common in cases involving large or multinational corporations than with a privately owned, closely held company such as the Trump Organization.

Pinning down Trump’s net worth is tricky; he doesn’t have to produce the same financial disclosures as publicly traded companies. In September, Forbes estimated his net worth for all holdings at $2.6 billion.

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James’ office sent PolitiFact examples of companies in civil litigation cases in a variety of jurisdictions posting bonds of $1 billion or more on appeal. They include a $1 billion bond for Samsung in 2014, a $1 billion bond for Cox Communications in 2021, and a $1.3 billion bond for SAP, a German software company, in 2011.

Each of those companies has annual revenue of at least $10 billion, so they are much larger than Trump’s combined holdings. 

A closer example is Marvell Semiconductor, a company that manufactures computer circuits. Its parent company has $5.5 billion in annual revenue, and it posted a $1.5 billion bond in 2014 over a patent infringement lawsuit brought by Carnegie Mellon University.

"Civil and criminal penalties against large publicly traded companies can run in the billions, but the Trump Organization is fairly small" by comparison, Joan Meyer, who has worked as a federal and local level prosecutor and is now a partner at the law firm Thompson Hine LLP, told PolitiFact. 

Meyer said it’s not surprising Trump is having difficulty finding a company to act as a guarantor, given the judgment’s size and the risk of backing him.

"Trump does not have the liquid assets to bring the bond amount down, and real estate is rarely used as collateral because it is very difficult to value certain pieces of property — particularly so with Trump, who is in possession of large estates and golf courses," Meyer said. "Moreover, any company that is willing to extend that kind of bond to Trump would likely demand an extremely large fee percentage to take on that risk."

Mitchell Epner, a former federal prosecutor who is now a litigator in private practice in New York, told CNN the judgment against Trump is notably large.

In a case filing, Senior Assistant Solicitor General Dennis Fan pushed back on Trump’s request to halt the order, writing that there is "nothing unusual" about billion-dollar judgments being fully bonded on appeal. 

"Defendants object to a possible 'fire sale' if they were to sell assets to generate cash to use as collateral for a bond or as a deposit, but the alternative would be to shift the risk of executing on defendants' illiquid assets to" the attorney general’s office, Fan wrote.

Trump said the $454 million bond he’s been assessed is "unprecedented, and practically impossible for ANY Company" to pay. 

It’s not unprecedented — some large companies have previously posted appellate bonds of $1 billion or more.

Larger appeal bonds have typically stemmed from cases involving large or multinational conglomerates, rather than closely held, privately owned companies such as Trump’s. 

The statement contains an element of truth; experts have said the judgment against Trump’s company is notably large. But it ignores critical facts about other companies that have paid even larger judgments. We rate it Mostly False.

RELATED: New York officials didn’t value Mar-a-Lago at $18 million. A Palm Beach property appraiser did.