April 21st 2024.
Letitia James, the Attorney General of New York, has made a request to Judge Arthur Engoron. She is asking for the $175 million bond posted by former President Donald Trump to be voided. Her concern is that the company he used to secure the bond does not have enough identifiable collateral. In addition, James is also seeking a larger monetary damage award while Trump appeals a $454 million verdict against him in a civil business fraud case.
According to CNBC, the lawyers representing James's office have filed a request stating that the company Trump used, Knight Specialty Insurance Company (KSIC), is a small insurer that is not authorized to conduct business in New York. This means that it is not regulated by the state's insurance department. They also note that KSIC has never written a surety bond in New York before or in the past two years in any other jurisdiction. Furthermore, the total policyholder surplus of the company is only $138 million.
The court filing reveals that the surplus of KSIC is less than the reduced bond amount of $175 million. As stated in an op-ed written by Ellie Quinlan Houghtaling for The New Republic, this would require the company to spend 127% of its reserves, which is far beyond the 10% allotted by New York law.
United Press International reports that James's office has criticized Trump for controlling the $175 million in cash placed into an account as collateral. They stated in a statement that the defendants failed to show that the bond is "sufficiently collateralized by identifiable assets." Additionally, they added that KSIC does not have the exclusive right to control the account and will only obtain such control if they exercise their right to do so with a two-day notice.
James's lawyers have also requested that Judge Engoron demand Trump and the other defendants to put up a replacement bond within a week of his ruling on the matter. A bond dispute hearing has been scheduled for April 22. In February, Judge Engoron found Trump and the other defendants guilty of fraud. He determined that they had inflated the value of various real estate assets to boost Trump's net worth. The amount that Trump has been ordered to pay, $454 million, is increasing each day due to accruing interest on the unpaid amount.
MSNBC reports that KSIC is part of the Hankey Group of Companies, which is run by Los Angeles-based billionaire Don Hankey. Some of Hankey's companies have faced issues with federal regulators in the past. Despite being a Trump supporter, Hankey has stated that he has no regrets about his company's decision to post Trump's bond. In an interview with Reuters, he said, "We thought it would be a straightforward procedure without any other legal problems, but it's turning out to be more complicated. Maybe we didn't charge enough. We've been receiving a lot of emails and phone calls. Perhaps that's why he faced difficulties with other insurance companies."
In related news, Donald Trump has been granted a grace period by the appeals court after the bond was reduced to $175 million in the civil fraud case.
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