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Trump’s New York real estate empire in limbo after fraud verdict

For more than a century, the Trump family has been developing real estate in New York.

But if former President Trump’s sweeping ruling in his civil fraud case is upheld, the family business with the same name could be out of business without Trump for the first time.

Judge Arthur Engoron on Friday barred Trump and his executives from serving as directors or officers of New York companies for three years. His adult sons, Donald Trump Jr. and Eric Trump, were banned for two years. It also expanded the powers given to the independent monitor overseeing the Trump Organization’s operations.

The ruling came after months of litigation, with a judge finding that Trump and his executives conspired to alter his net worth in order to receive tax and insurance benefits.

Will Thomas, a business law professor at the University of Michigan, said the Trump Organization could be “hamstrung” by the decision, as senior members of Trump’s ranks will be ousted unless a legal appeal is successful.

“It’s completely unclear. Who is going to do this?” Thomas said.

The Trump family’s real estate business began with the former president’s grandfather, who began buying land in New York City in the early 1900s. Trump’s father, Fred Trump, expanded the business, and the former president himself turned it into the empire it is today.

Trump’s first big project He started as a young developer in Manhattan in 1976, beginning a decades-long career in real estate that rose to fame and later led him to the White House.

During the trial, Trump’s lawyer Chris Kiss described the former president as “part of the fabric” of the half-century-old New York real estate industry, and said he was “part of the fabric” of New York’s attorney general, Letitia, who tried to put him out of business. James (Democratic Party)”. ”

The ruling won’t shut down Trump’s company, but it could shake up the organization.

Donald Trump Jr. and Eric Trump have jointly run the Trump Organization as executive vice presidents since 2017, when their father began his term as president. The ruling will prevent them from holding top leadership positions.

It’s still possible that Mr. Trump will follow Mr. Engoron’s orders and appoint someone to lead his company. He is prohibited from serving on the board, but as an owner of the Trump Organization or other entities, he could elect directors to serve in his place. These directors can choose the officers who run the day-to-day operations.

“It’s a very different kind of business because… if the owners want to have some say, they have to find someone to stand as director for them,” Brian Quinn said. . Professor of Law at Boston University.

The question, Thomas said, will be who Trump chooses.

“One of the striking features of this case is that it reveals how pervasive this type of practice was throughout the organization,” he said. “A condition for being appointed to a leadership position in the Trump Organization, at least until now, appears to be a willingness to engage in fraud, at least routinely, if not enthusiastically.”

There is nothing to prevent President Trump from choosing a non-prohibited family member to fill the role. Quinn said his wife Melania Trump, his daughter Ivanka Trump and his son-in-law Jared Kushner are also possible candidates.

However, any decision would be scrutinized by a court-imposed independent monitor.

“They still have to abide by the law, they can’t be persistently fraudulent, their financial statements, etc. have to be accurate, but LLCs aren’t left adrift without that possibility. “No, it’s in the hands of some family,” Quinn said.

A spokesperson for the Trump Organization called the ruling a “serious miscarriage of justice,” predicting that if it were allowed to stand, it would “only accelerate the exodus of companies from New York.” A spokesperson did not comment on future business plans.

In his ruling, Engoron expanded the role of an independent monitor he appointed, former U.S. District Judge Barbara Jones, and ordered him to continue monitoring the Trump Organization for at least three more years.

“There’s going to be an outsider in the room, and that outsider is probably going to be making sure that… there’s compliance with the sentence,” Quinn said.

Jones told the court: last month Even though the Trump Organization cooperated with her oversight, she said the materials she reviewed contained “incomplete disclosures, inconsistent presentations of results, and/or disclosures containing errors.” He said he had identified “defects.”

Engoron ruled that the Trump Organization must get Mr. Jones’ approval before releasing financial information to third parties and required the company to have an independent compliance director overseen by Mr. Jones. commanded.

The judge also asked the retired judge to submit a proposed order outlining “the specific powers he believes are necessary to keep the defendant honest.”

“I think it’s no exaggeration to say that the next few years are going to be very difficult for the Trump Organization to navigate,” 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.”

Copyright 2024 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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