Trump’s finances take massive hit from ‘double whammy’ of legal blows

Donald Trump’s fortune, which was inextricably tied to his fame and public identity, is in jeopardy of a flurry of lawsuits in two New York civil lawsuits that imposed astronomical financial penalties on the former president. The verdict could be devastating.

A New York judge on Friday ordered Trump to pay about $355 million, plus interest, for falsely altering his net worth in key financial statements to collect tax and insurance benefits.

The decision was slightly less than the fine sought by New York Attorney General Letitia James (D), who sued President Trump in 2022 for deceptive business practices. But once interest is generated, the number could reach just over $450 million, the agency said.

This comes in response to allegations that President Trump defamed her in 2019 and that longtime advice columnist E. Jean Carroll denies accusations that he sexually assaulted her decades ago. That’s in addition to the $83.3 million that a New York City jury said he must pay.

Combined, the two fines amount to a whopping $438.1 million, and with interest on the fraud fine, the amount could exceed $500 million.

“This is a huge amount of money. I don’t care how rich you are,” said Will Thomas, a business law professor at the University of Michigan.

personal assets take a big hit

Trump’s net worth is notoriously unclear. but, forbes The former president’s wealth is estimated at $2.6 billion. Bloomberg Billionaires Index He was thought to be worth $3.1 billion.

Forbes and Bloomberg both estimate that President Trump may have about $600 million in liquid assets, meaning cash and personal assets. According to Forbes, these personal assets include his personal home, private jet, and pension.

in deposition Last year, President Trump told lawyers at the New York attorney general’s office that he had “effectively over $400 million in cash.”

“We have a lot of cash,” Trump said, claiming that the amount is “growing significantly every month.”

The total fines amount to more than $500 million, and Trump would lose an estimated 16% to 19% or more of his net worth, which estimates say ranges from $2.6 billion to $3.1 billion. If it’s worth it.

Assets at risk

Thomas said President Trump may have to sell some of his valuable assets if he can’t find the cash to pay the hefty double judgment.

“It would be quite disconcerting because not only would he lose a lot of money, he could be put in a situation where he would have to sell some of his real estate properties, and even more quickly or later. We may even have to sell for less than “unfavorable terms,” Thomas said. “It’s kind of a double whammy.”

Before the trial began, Engoron accused Trump and his companies of “repeated and persistent fraud” on the former president’s financial statements by overvaluing real estate that helped build the brand of Trump’s businesses. It was decided that he had committed a crime.

A judge ordered the business licenses of any entities that profited from the fraud to be revoked, a decision Trump’s lawyers called at the time “indefensible under the law or a reasonable view of the facts.” called. The cancellation was blocked by a state appellate court.

The decision was thought to affect a number of properties owned or partially controlled by Trump and his businesses, including famous buildings such as Trump Tower and 40 Wall Street. Mr. Trump’s New York real estate alone accounts for more than a quarter of his estimated total wealth, and if management of Mr. Trump’s estate were to cease, he would lose more than $700 million.

But Engoron on Friday reversed that decision, writing that even though the law allows licenses to be revoked, doing so “could raise serious financial concerns.” Still, he said the previous order could be renewed if an independent monitor determined the company had not complied with his ruling.

Thomas said Engoron’s decision to continue installing an independent watchdog to oversee President Trump’s business operations could only increase risk to Trump’s assets in the future.

“The monitor came back and said, ‘These people are out of control. They’re out of control. We can’t make them behave.’ … The court said, ‘I’ve granted a stay of dissolution. I’m going to change my mind. ” he said.

The Engoron decision also barred Trump from holding top leadership positions at New York companies for three years, and his adult sons Donald Trump Jr. and Eric Trump for two years.

“Even though this opinion does not legally force Mr. Trump to destroy or dissolve some of these assets, it would make it very difficult for the Trump Organization to navigate in the coming years. I don’t think that’s an exaggeration,” Thomas said. “I’m not saying that’s the most likely outcome, but I wouldn’t be surprised at all if companies didn’t survive this transition.”

If Trump’s business license revocation is reinstated, it is unclear whether his assets outside New York state, including his exclusive Mar-a-Lago property, will be affected by the ruling. Engoron said in a previous ruling that the county assessor valued Mar-a-Lago’s market value at between $18 million and $27.6 million, while President Trump valued the property at between $426 million and $612 million. He pointed out that it was valued at US$.

Adam Reitman Bailey, a New York real estate lawyer, said the court’s attempt to sanction Mar-a-Lago will fail despite Engoron’s extensive treatment of Mar-a-Lago in his decision. He said it would be.

“Judges have no authority to touch on, report on, or make decisions outside the state of New York,” Reitman Bailey said.

But he added that states could use the New York Supreme Court’s ruling as a basis for similar lawsuits against properties like Mar-a-Lago.

Lawyers are expensive

Even with Friday’s ruling, President Trump’s legal problems are unlikely to end. His four criminal cases and numerous other civil cases could continue to rack up legal fees.

In October, Trump told supporters in Iowa that he had already spent more than $100 million in legal fees. His fundraising committee spent about $50 million on legal consulting in 2023, with about $30 million donated in the second half of the year as his legal troubles got underway, according to recently filed federal records. .

Chris Kiss, President Trump’s lead attorney in the fraud case, defrauded James of nearly $9 million of those funds and falsely altered net worth in key financial statements in order to receive tax and insurance benefits. earned money defending the former president against. Mr. Kise is also representing Mr. Trump in a federal criminal case over allegations of mishandling of classified documents.

Lawyers Alina Haba and Clifford Robert also represented Mr. Trump, his company, and his management team, including Mr. Trump’s adult son, who earned about $4 million and $5.3 million, respectively. .

One potential economic lifeline for Trump could materialize if he becomes the Republican nominee. If Trump continues to win in the Republican primaries, he could clinch the nomination as early as mid-March, needing just 1,215 delegates to win the title.

If Trump becomes the presumptive nominee, his campaign could work with the Republican National Committee (RNC) to raise money, giving the former president a significant boost in political activity in what is expected to be a long election cycle. It will give you strength. .

What’s next?

President Trump has vowed to appeal both the fraud verdict and the Carroll decision, which could reduce the amount of damages he ultimately has to pay.

“If this decision is left unaddressed, it will cause irreparable damage to both our country’s business community and the rule of law,” Kise said.

But unless an appeals court blocks those rulings, the former president will have to cough up the cash.

David Slarski, a New York-based corporate litigation lawyer, said posting collateral or an appeals bond automatically triggers a stay, but that way, if Trump loses his appeal, those funds will be freed. It said it would be “immediately available for retrieval.”

“My guess is that[Trump’s lawyers]probably don’t want to do that because that would be automatic,” he said. “That payment will be made after the judgment is finalized.”

Thomas said it may also be difficult for the former president to find a lender willing to cover his costs, given the nature of the judgment against him.

“There’s a certain irony to this. I mean, this is a case where he was just found to have committed fraud against a major financial institution, and now he goes to a major financial institution and defrauds a major financial institution of $500 million. “Do you mean to ask for a loan?” he said.

Trump could temporarily avoid paying the fine by filing for bankruptcy. Rudy Giuliani, a staunch ally of President Trump, paid a staggering $148 million to two former Georgia election officials he baselessly accused of fraud in the 2020 election. It filed for bankruptcy days after being ordered to do so by a federal jury.

But for Trump to file for bankruptcy, he would need to prove that the damages exceed his total net worth.

Last month, President Trump reiterated his claim Because he was “worth far more than the numbers shown on my financial statements,” James sued him and the bill was significantly inflated.

“By definition, if he can’t pay a $400 million judgment and is subject to bankruptcy, that means he’s not worth $400 million,” Thomas said. “It’s one thing for a court to say you’re not as rich as you say you are, but to go bankrupt Donald Trump has to say, ‘I don’t have that money.'”

Clayton Vickers and Brett Samuels contributed.