The recent $355 million civil fraud judgment against Donald Trump may significantly strain the ex-U.S. president’s finances in the near future.
Hefty Price for Fraud Case
Arthur Engoron, the presiding judge of the civil business fraud case against Trump issued an order on Friday, mandating that the former president, along with his sons, associates, and company, pay upwards of $350 million in damages.
Multi-Million Payment
The judgment by Judge Engoron requires Trump and the Trump Organization to pay damages exceeding $354 million, and also bars Trump from holding any executive role in New York-based corporations or entities for a three-year span, including his own company.
Engoron concluded that Trump had exaggerated his net worth to secure favorable loan terms.
A $450M Blow to Trump
New York Attorney General Letitia James, whose office initiated the lawsuit, announced that with added pre-judgment interest, the total judgment surpasses $450 million.
Real Estate Empire at Stake
The fallout from Justice Arthur Engoron’s ruling could significantly affect Donald Trump’s real estate empire, which spans a global network of roughly 500 entities.
Financial Uncertainty
Though Forbes estimates his net worth at $2.6 billion, largely in real estate, the true value of these assets remains uncertain amidst fluctuating commercial real estate market conditions.
Real Value of Properties
Despite Trump claiming to have around $400 million in cash during an April deposition, the judgment’s enormity and the commercial real estate market’s uncertainties raise questions about the real value of his properties.
Loan Restrictions
The prohibition on obtaining loans from New York banks could also severely limit his options to generate cash, especially considering the additional $83 million he owes to E. Jean Carroll for defamation.
Obligations Vs. Opportunities
Donald Trump’s financial landscape presents both challenges and opportunities. While he faces significant legal financial obligations, including the recent $5 million damages ordered by a Manhattan jury to E. Jean Carroll in a defamation and sexual assault case, he also holds potentially lucrative assets.
Trump, who consistently denies the allegations, is appealing both verdicts.
Potential Cash Influx
Trump’s stake in Trump Media & Technology Group, the parent company of Truth Social, stands as a notable asset. Valued at about $4 billion, thanks to the rising stock of a SPAC that plans to merge with it, this stake could become highly liquid following regulatory approval of the deal.
Financial Boost
With regulatory approval secured this week, Trump could potentially liquidate his shares six months post-merger, potentially in the first half of 2024, offering a substantial financial boost.
Campaign Funds
Trump is prohibited from utilizing campaign funds to settle the judgment from the case initiated by New York Attorney General Letitia James. This case is not linked to his political campaign or his actions as a president or political candidate.
Personal Costs
Legal experts emphasize that damages awards are personal expenses, and this stands irrespective of Trump and his lawyers’ claims of the case being politically driven.
The Appeal Process
Trump’s legal team has indicated plans to appeal the decision. In such cases, it’s common for the full judgment amount, plus interest, to be deposited during the appeal.
A Financial Gamble
Trump might opt for an appeal bond, a type of loan requiring a smaller amount with collateral and interest. However, securing this loan could be challenging due to Engoron’s ruling on Trump’s misrepresentation of his wealth to banks.
Uncertainty Looms
The appeal process could extend over a year, and it’s uncertain if an appellate court would suspend Engoron’s decision during the appeal period.
Non-Compliance Risks
Should Donald Trump fail to comply with the payment requirements after exhausting his appeals in the civil fraud case, he could face legal repercussions such as being held in contempt of court, which may include the imposition of further fines.
Additionally, the state might pursue wage garnishment from Trump’s income sources.
Imprisonment?
Imprisonment as a consequence of failing to pay in a civil fraud case, like the one involving Donald Trump, is a rare and extreme measure, typically reserved for egregious or deliberate defiance of court orders.
A Legal Rarity
In most instances, courts prefer to enforce payment through other means, such as garnishing wages or imposing additional fines. Therefore, while theoretically possible, the likelihood of imprisonment in such cases is exceptionally low.
Trump Denounces Lawsuit
Trump, maintaining his innocence, has branded the lawsuit as a political attack by New York Attorney General Letitia James, a Democrat.
An Election Risk?
The ruling by Engoron could have a significant impact on Donald Trump’s financial situation as he seeks the Republican nomination to challenge President Joe Biden in the upcoming November 5 U.S. election.
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