The New York Attorney General's Office on Thursday took a $175 million bond exception, Donald J. Trump recently questioned the merits of the California company that issued it in his civil fraud case.
The controversy stems from a $454 million judgment Mr. Trump faced in a lawsuit brought by the attorney general's office against the former president and his family business. Attorney General, Letitia James, Mr. Trump has been accused of fraudulently inflating his net worth, leading to a month-long trial last year that resulted in a judge imposing a hefty fine.
Mr. Trump must obtain the bond as financial security when he appeals the fine — otherwise opening himself up to the possibility of Ms. James collecting. Without bond, she could have begun the complicated process of freezing his bank accounts and trying to seize some of his New York assets.
Mr. Trump averted the disaster on Monday when he posted a $175 million bond from California firm Knight Specialty Insurance. Although he first had to secure the full $454 million judgment, an appeals court recently granted him a break, allowing him to post a smaller bond.
By issuing the bond — which is a legal document, not an actual money transfer — Knight is promising the New York court system that Trump will cover $175 million of the judgment against him if he loses his appeal and fails to pay. In response, Mr. Trump pays Knight a fee and pledges a substantial amount as collateral.
However, now Ms. James raises questions that could jeopardize his deal with Knight, owned by Don Hankey, a billionaire who made his fortune through subprime loans. And the judge in the case, Arthur F. Engoron has tentatively scheduled an April 22 hearing to discuss the bond.
In a court filing on Thursday, Ms. James argued that Knight was not registered in New York to issue appellate bonds, and therefore neither the company nor Mr. He also demanded that Trump's lawyers file documents to “justify” the bond within 10 days. Ms James is seeking to clarify whether Knight, who has never filed a similar court bond before helping Mr Trump, is financially capable of fulfilling his obligation to pay $175 million if Mr Trump defaults.
Even if Knight doesn't have funds, the company can tap as collateral, Mr. Trump promised.
In an interview this week, Mr. Hankey said Mr Trump had pledged $175 million as collateral handled by a brokerage firm. Mr Trump, meanwhile, could earn interest on the money.
In a statement on Thursday, Mr. Trump's lawyer, Christopher M. Kiss slammed Ms. James, calling her lawsuit a “baseless and vindictive political crusade” and her opposition to the bond “an attempt to incite some baseless public.” Fight in a desperate attempt to regain fitness.
The Chief Executive Officer of Knight Insurance Group, the parent company of Knight Specialty Insurance, Mr. Hanky and Amit Shah did not immediately return requests for comment on Thursday. Mr. Shah told CBS News Knight was authorized to issue the bond through the Excess Line Association of New York, a nonprofit corporation created by New York State.
In an earlier interview, Mr. Mr. Trump said he had been in contact with representatives. Hanky said. Mr. Hankey said his motivation was business, not politics.
Knight Insurance Group is one of eight companies under the Hankey Group, all based in Southern California. Mr. Hankey gained a reputation as a provider of risky and profitable loans, especially since collateral-based loans could be arranged more quickly than conventional loans and required borrowers to pledge valuable assets.
According to news accounts and regulators, his companies are known to call people who miss a day's payments incessantly and repossess vehicles from borrowers.
After an appeals court reduced the bond to $175 million, Mr. Mr. Trump's representatives called him and asked if his company could arrange the bond. Hanky said.
“I said, 'We'll be happy,'” Mr. Hankey said Wednesday. “I would have done it for Donald Trump. I would have done it for a Democrat.
