Photo: Jeenah Moon/Bloomberg via Getty Images
When Judge Arthur Engoron handed down a $464 million penalty to Donald Trump earlier this month, the ex-president found himself in a bind. With most of his net worth tied up in real estate, Trump does not have the cash to pay the fines outright — meaning he would need to seek out a loan to avoid a fire sale of his properties. But because Engoron banned Trump from taking out loans with New York banks, he could not easily get a loan to secure a bond for the full monetary judgment.
But on Wednesday, Trump caught a break: New York Supreme Court Appellate Judge Anil Singh ruled that Trump can apply for a loan to pay the bond on the nearly half-billion in fines, responding to a filing Trump’s team had made earlier that day in appeals court.
This means that, for the time being, Trump will not need to sell off his New York properties. But it was far from a total victory. Trump’s lawyers lost their effort to pause enforcement of the penalty, or to remove the independent director of compliance who oversees the Trump Organization now that Trump has been barred from doing so. Bloomberg also reports that the ruling will only remain valid “until a full appellate panel hears Trump’s request for a delay that would last for his entire appeal.”
Before Judge Singh delivered his decision, Trump’s lawyers argued that if he could not apply for loans, he would probably need to sell some of his assets in New York. “The exorbitant and punitive amount of the judgment coupled with an unlawful and unconstitutional blanket prohibition on lending transactions would make it impossible to secure and post a complete bond,” they wrote. Singh’s decision now allows Trump to go to a bank to get the money — though he will still be required to pay tens of thousands of dollars in interest each day the bond is not posted.
But due to his six bankruptcies and a long history of not paying bills, some major banks are understandably hesitant to loan to the former president, which has required him to go off the beaten path for post-presidential refinancing. When Trump goes to a lender in the next few weeks, he may need to negotiate on highly unfavorable terms. He might not have to sell off his New York properties just yet, but he may have to put one up as collateral.
