New York Attorney General Letitia James requested on Friday that a judge invalidate the bond posted by former President Donald Trump in his civil fraud case on the grounds the company that issued it does not have the necessary collateral to back it up.
In February, Manhattan Judge Arthur Engoron levelled a $464 million penalty on the former president after he, The Trump Organization, and his adult sons were found guilty of financial fraud. In March, an appeals court lowered the bond amount to $175 million.
In the Friday filing, lawyers from the attorney general’s office state that California-based Knight Specialty Insurance Company (KSIC) is a "small insurer that is not authorized to write business in New York."
"Based on the foregoing, the People respectfully request that the Court deny Movants’ motion to justify the surety, declare the Bond to be without effect, and order that any replacement bond be posted within seven days, along with such other and further relief the Court deems necessary and appropriate," the filing stated.
The attorney general’s filing comes prior to a pre-scheduled hearing set for Monday. They have asked Judge Engoron to require Trump and his co-defendants to put up a replacement bond within seven days of ruling on the issue.
"Based on KSIC’s policyholder surplus in its most recent annual financial statement of $138,441,671, the limitation of loss on any one risk that KSIC is permitted to write is $13.8 million," the lawyers wrote. "The face amount of the bond exceeds this limitation by $161.2 million."
Earlier in the week, Knight filed with the state court in Manhattan stating that the bond was backed in cash by a Charles Schwab account and that it could access close to $2.2 billion in assets at its parent company if something went amiss.
"By any standard, KSIC has therefore provided assurance to (James) that she can collect the designated amount if the award is affirmed on appeal," Knight said. "KSIC was and is authorized to issue the bond."
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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