Trump Gets Partial Relief in Effort to Stop Enforcement of Huge Civil-Fraud Judgment Pending Appeal

There’s an update since we posted my column this afternoon about former president Trump’s representation to a New York appellate court that he cannot post a bond of more than $100 million — far short of the $454 million judgment rendered against him. Trump was seeking a stay pending appeal of New York attorney general Letitia James’s enforcement of the judgment. Absent court relief, Trump must post a bond in the full amount, plus interest, by March 25. Otherwise, either he will have to pay the full amount (which he’s obviously not prepared to do), or James will be permitted to begin litigation to seize his assets in satisfaction of the judgment.

This afternoon, a state appellate judge denied Trump’s application to stay enforcement of the judgment. As of now, he is still required to post a bond in the full amount in order to stave off James while he appeals the civil-fraud verdict.

Nevertheless, Justice Anil C. Singh did give Trump some relief. He agreed to stay enforcement of several aspects of the verdict and judgment rendered by the trial judge, Arthur Engoron. Most consequentially for present purposes, the part that barred Trump from seeking loans has been stayed.

Engoron’s ruling had prohibited Trump (as well as other defendants, including the Trump Organization) from “applying for loans from any financial institution chartered by or registered with the New York State Department of Financial Services” for three years (i.e., through late February 2027). Virtually every major bank in the United States is registered to do business in New York, and many are chartered by the Empire State.

At least theoretically, Trump will now have an opportunity to arrange loans to secure a bond. As a practical matter, of course, it takes two to tango. Even absent a strict prohibition against applying for loans, Trump’s financial straits are very tough right now. Lenders will be worried about his future capacity to repay gigantic loans, and about the fact that they would have to compete with judgment-creditors (such as New York state and E. Jean Carroll), who would also be seeking to seize collateral assets if he cannot satisfy his obligations.

Judge Singh’s order also stayed Engoron’s directives that barred Trump and the other defendants from serving New York corporations in financial-control positions or as officers or directors. They will thus be able to continue leading the Trump Organization, subject to monitoring by former federal judge Barbara S. Jones (who was installed by Engoron prior to the trial), and to the installation of a “Director of Compliance.” (Public companies, and most sizable private ones, have compliance departments to ensure internally that they are adhering to legal requirements and the company’s own guidelines.)

Singh also put Trump’s motion on the appellate division’s calendar to be heard on March 18. That means that even though Singh — acting alone, on an emergency basis — declined to relieve Trump of the need to post a bond for the full amount of the judgment, the former president will have an opportunity, prior to March 25, to argue the motion before a full five-judge panel of the appellate court.

Many observers familiar with New York practice assess that Trump has little chance of prevailing on that point. I am not convinced this is so: The amount of the judgment is so out of proportion with the wrong proved by the state — which was unable to prove there were any fraud victims after eleven weeks of trial — that it may offend the higher court’s sense of fairness. Like the Eighth Amendment to the federal Constitution, New York’s Constitution explicitly forbids the imposition of “excessive fines.”

Ultimately, Trump may not prevail on an excessive-fine claim. But one could easily see the appellate court reducing the “disgorgement” penalty, perhaps drastically. Indeed, in what was a patently politicized lawsuit — brought by an elected progressive Democratic attorney general, and presided over by an elected progressive Democratic judge, both of whom were unabashed in their loathing of Trump — I believe the objective of such an exorbitant fine was to make it difficult for Trump to appeal.

Consequently, I could see the appellate court agreeing to allow Trump to post a bond in an amount substantially lower than $454 million, with the proviso that if James prevails on the full amount on appeal, she can seek to collect from Trump post-appeal. Meantime, if Trump wins a reduction on appeal, a bond of much less than $454 million would cover it.

We’ll keep following the case.