Judge Refuses Trump’s Appeal to Delay $454 Million Penalty

On Wednesday, Donald J. Trump’s initial attempt to halt the more than $450 million judgment he faces in a civil fraud case was unsuccessful in a New York appeals court. This decision potentially places him in financial jeopardy.

Trump’s legal team had requested the court to permit him to post a $100 million bond, citing the difficulty in securing one for the full amount. Anil Singh, the appellate court judge assigned to the case, denied Trump’s request. Trump will make another attempt next month before a panel of five appellate court judges. Currently, he remains obligated to secure a bond for the full amount, which poses challenges as potential providers may demand cash and other collateral he doesn’t presently possess.

Failure to secure the bond could result in the New York attorney general’s office, which filed the case alleging Trump’s fraudulent inflation of his net worth, collecting the $454 million judgment. Attorney General Letitia James is expected to grant Trump a 30-day grace period until March 25, after which she could move to seize his bank accounts and possibly take control of his New York properties.

The $454 million judgment, imposed by trial judge Arthur F. Engoron, includes various penalties against Trump and his family business. These penalties include a three-year prohibition on obtaining loans from New York banks and a ban on operating a company in the state during that period. These restrictions further complicate Trump’s efforts to secure a bond.

Mr. Trump’s legal team argued to the appeals court that the excessive and punitive nature of the judgment, coupled with an unlawful and unconstitutional blanket prohibition on lending transactions, would render it impossible to secure and post a complete bond. Justice Singh, however, temporarily halted these penalties on Wednesday, potentially facilitating the acquisition of a bond for the full amount.

Financial relief might be forthcoming from a separate avenue: Mr. Trump’s ownership in Trump Media & Technology Group, his social media enterprise, could be valued at up to $4 billion following a protracted merger, though it won’t be finalized in time for Ms. James’s March 25 deadline.

In their own submission, Ms. James’s office urged the appeals court to reject Mr. Trump’s plea. They contended that there is no justification for the defendants’ argument that a full bond or deposit is unnecessary, citing their willingness to only post a partial undertaking of less than a quarter of the judgment amount. The attorney general’s office maintained that Mr. Trump lacks sufficient liquid assets to satisfy the judgment, a point which the defendants scarcely dispute.

Christopher M. Kise, a lawyer for Mr. Trump, did not immediately respond to requests for comment.

However the matter is resolved, Mr. Trump’s plea for relief reflects a notable concession from a figure whose public persona is synonymous with wealth. His ostentatious displays of opulence propelled him to tabloid fame, a stark contrast to the current narrative of him grappling to evade financial woes.

Ms. James built her case on the assertion that Mr. Trump had fraudulently inflated his net worth by as much as $2 billion, purportedly to secure favorable loans and other financial advantages. Justice Engoron sided with Ms. James, concluding that Mr. Trump had indeed defrauded his lenders, who had anticipated him to maintain a certain net worth.

Mr. Trump’s primary source of wealth stems from his real estate holdings, with the combined value of the judgment in the civil fraud case and the $83.3 million judgment he faces from a defamation trial involving writer E. Jean Carroll surpassing his liquid assets.

As of last year, Mr. Trump held over $350 million in cash, along with stocks and bonds readily available for sale, as per a recent examination of his financial records by The New York Times.

Mr. Trump seems to be encountering difficulties in securing a bond for the defamation case as well. He must arrange this by early next month, and his legal team has recently requested either an extension or a reduction in the bond amount from the court.

In its simplest form, a bond is a document provided by a company to the court on behalf of a defendant. The bond company assures the court that it will cover the judgment if the defendant, in this instance Mr. Trump, loses an appeal and fails to make payment.

In return, Mr. Trump would be required to pay a premium fee to the bond company, typically ranging from 1 to 3 percent of the judgment. Additionally, he would need to offer collateral to the bond company, which could include cash, stocks, and bonds.

While the specifics of each arrangement vary, companies providing appeal bonds may be hesitant to accept Mr. Trump’s properties as collateral, particularly if a building already has an existing mortgage, experts have noted.

Legal analysts have suggested that even if Mr. Trump loses before the five-judge appellate panel, he may still need to provide a larger bond. They pointed out that his legal team did not present the $100 million bond as the only potential outcome.

“The $100 million bond resembles an initial bid in a real estate negotiation,” explained Mark Zauderer, a partner at the law firm Dorf Nelson & Zauderer, who has extensive experience as a New York business litigator and has arranged numerous appeal bonds. “However, in this case, the final determination of the actual security amount will be made by the court, not Trump.”