Trump’s financial problems are very real and very bad
The danger posed to Donald Trump’s finances by two recent judgments against him has been, if anything, underappreciated. The size of the awards, the structure of the former president’s business empire, and the condition of the real-estate market combine to create a truly perilous moment for the former president’s company and, by extension, for Trump’s personal finances.
Trump must put up the $83.3 million awarded to the writer E. Jean Carroll for defamation by March 9. He also owes more than $450 million—the amount continues to grow because of interest—in a fraud case brought by New York Attorney General Letitia James, and must put up cash or post a bond by March 25. He has appealed both decisions.
Trump doesn’t have that money on hand. In an April 2023 deposition for the fraud case, Trump said, “We have a lot of cash. I believe we have substantially in excess of $400 million in cash, which is a lot for a developer. Developers usually don’t have cash. They have assets, not cash. We have, I believe, $400-plus and going up very substantially every month.”
If this was true at the time, which is doubtful, it is not true now. On February 28, he asked an appellate court to reduce the bond amount in the fraud case to $100 million, and said he might have to sell properties otherwise. The court declined to lower the bond, but did temporarily stay the ruling by the trial judge, Arthur Engoron, that Trump couldn’t seek loans from banks.
Even before the formal finding that many of the Trump Organization’s property valuations were fabricated, pinning down anything definitive about the firm’s finances has always been challenging. Because it is a privately held company, much information about it is secret. Trump’s name has always been synonymous with (to be charitable) puffery and hyperbole. Independent assessments place his net worth in the billions, but as he suggested in the deposition, that’s largely in real property or in hazy estimates of brand value.
Typically, a defendant who has substantial assets but needs piles of cash will obtain a bond, rather than posting the money themselves. Under such an arrangement, a bonding company effectively vouches for Trump with the court, guaranteeing that the money is available. If Trump wins his appeal, he pays the bonding company only a fee. If he loses, he has to pay in full. But Trump seems to be struggling to obtain such a bond. In requesting that the amount be reduced, his lawyers said coming up with the current total would be “impossible,” forcing him to sell properties. [Continue reading…]