The $175 million bond posted by an insurance company for former President Donald Trump in a civil fraud case can stand after an agreement Monday that included assurances from his lawyers to comply with conditions from the Attorney General's office.
New York Attorney General Letitia James's office argued it is concerned about the financial wherewithal of Knight Specialty Insurance company, which posted the bond for Trump on April 1.
The agreement should be finalized by Friday, and some of the details require Schwab, the managers of the money market account, to agree to the terms.
A bond is necessary to prevent James' office from collecting more than $464 million from Trump and other defendants after they were found liable for a decade-long fraud scheme.
In protesting the bond, James' office said $175 million in cash that Trump claimed to have provided as collateral remained under control of his revocable trust, and not in a Knight account.
Trump Organization's $175 Million Bond Payment
During a 30-minute court session on Monday, Chris Kise, the lead attorney for the Trump Organization, confirmed that the $175 million bond required by the court was paid in cash. The amount was then deposited into an interest-bearing money market account that is protected from any loss in value. Kise mentioned that the cash account is generating approximately $400,000 in interest every two weeks.
Despite the security measures, it was disclosed that Trump retains the ability to withdraw funds from the account or substitute them with other assets that may be subject to market fluctuations. Attorneys representing James, however, expressed concerns that the bond's security could be compromised if its value were to fall below $175 million.
In a filing dated April 19, the attorney general raised doubts about Knight, the entity overseeing Trump's funds, meeting the necessary criteria to act as a surety bondholder.
According to reports by CBS News, Knight may not comply with a New York insurance law provision restricting companies from risking more than 10% of their capital. The attorney general's office highlighted that Knight's surplus is only $138 million, limiting its liability to a maximum of $13.8 million under New York regulations.
Concerns Over Knight's Practices
The attorney general further criticized Knight for relying on risk transfer strategies that artificially inflate its surplus. James also accused Knight's management of engaging in actions that have violated federal laws "repeatedly" in recent years.
During Monday's session, Trump was present in a courtroom just a block away, attentively listening to the opening statements made by a Manhattan criminal prosecutor in a separate case.
Trump holds the distinction of being the first former president in U.S. history to face criminal charges and stand trial. The jury in this case was informed that Manhattan District Attorney Alvin Bragg's team would present evidence to support 34 felony charges related to falsifying business records. Bragg's office alleges that Trump and his former attorney Michael Cohen colluded to conceal reimbursements after Cohen paid $130,000 to an adult film star in exchange for her silence regarding an alleged intimate encounter with Trump.
Trump has vehemently refuted all accusations in both cases and has pleaded not guilty in the criminal proceedings. His legal representatives argue that the cases lack substantial evidence and have consistently questioned Cohen's credibility. They have accused James and Bragg of targeting Trump in what they describe as a "witch hunt" aimed at undermining Trump's potential bid for the presidency in 2024.
