Republican presidential candidate and former U.S. President Donald Trump speaks during a Fox News town hall at the Greenville Convention Center in Greenville, South Carolina, on Feb. 20, 2024.
Justin Sullivan | Getty Images
Donald Trump is racing to stave off a pair of civil penalties totaling nearly $540 million, without having to first put up the full amounts in cash or bonds.
The former president’s lawyers claim that he would face “irreparable” harm if required to fully secure his judgments in order to keep them from coming due, and might even have to quickly sell off properties that can’t be rebought.
They also say Trump can’t simply post a cash deposit — at least not in his New York civil business fraud case, where he is facing $454 million in fines and interest alone.
“No one, including Jeff Bezos, Elon Musk and Donald Trump, has five hundred million laying around,” Trump’s attorney Chris Kise told an appeals court judge last week.
But legal experts say there’s another option that Trump’s lawyers haven’t mentioned in the court filings: Trump could offer up some of his properties as collateral to borrow what he needs — potentially from private equity sources.
There are “lots of private lenders out there in the debt markets and private equity markets that could lend” to Trump, said Columbia University law professor Eric Talley.
“In all cases, the loans would probably have to be secured with Trump properties, but if there is enough equity in some of them, he should be able to obtain secured credit, even on a compressed timeline,” Talley said.
In this courtroom sketch, former U.S. President Donald Trump looks on as his attorney Alina Habba delivers closing arguments during E. Jean Carroll’s second civil trial in which Carroll accused Trump of raping her decades ago, at Manhattan Federal Court in New York City on Jan. 26, 2024.
Jane Rosenberg | Reuters
The professor underscored the irony of Trump using his real estate to fight a lawsuit in which he was found liable for fraudulently inflating his property values for financial gain.
Any loans “would themselves involve making declarations of the value of the property — and that of course is what got him into this mess to begin with,” said Talley.
But accurately appraising the value of Trump’s assets is not a serious obstacle. As Trump’s lawyers noted during the fraud trial, the institutions that have lent him money already have conducted their own analyses of Trump’s finances, and did not rely solely on the claims at issue in his financial statements.
A more important factor could be whether Trump’s real estate assets are already mortgaged, said law professor John Coffee.
“He would have to come up with clean real estate property that is not already securing something that some other bank has a lien on,” Coffee said.
“Does he have that property? I can’t tell you.”
What Trump owns
As of late January, the Trump Organization comprised 415 entities, according to Barbara Jones, a retired federal judge tasked with monitoring the company’s finances.
Of those, Jones identified 70 operating entities that generate revenue. That includes long-term leases of buildings such as 40 Wall Street, commercial office space on 13 floors of the 58-story Trump Tower, plus the Trump National Doral Miami resort.
In New York City, the value of Trump’s real estate holdings totals $690 million, according to a September 2023 estimate by Forbes. Some of the most prominent buildings that bear Trump’s name in the city are largely owned by other entities.
New York Attorney General Letitia James, who brought the fraud case, said she would seize Trump’s real estate assets if he cannot pay his civil penalty.
“There’s absolutely no reason for the New York attorney general to be kind and gentle to him if he doesn’t post the bond,” Coffee said.
A view leading into Trump National Doral in Miami, Florida, on April 3, 2018.
Michele Eve Sandberg | AFP | Getty Images
Trump said in a deposition last year that he had “substantially in excess of $400 million in cash.” But his lawyers claimed last week that, if Trump is forced to secure the full $454 million penalty, “properties would likely need to be sold to raise capital under exigent circumstances.”
They instead offered to post a $100 million bond, but New York appeals court Judge Anil Singh rejected the proposal.
Unless a full appeals court reverses Singh’s decision, Trump has until March 25 to post an “undertaking” — cash or bonds — covering the entire penalty in order to stop it from taking effect during his appeal.
Trump has also asked a federal judge to delay another fast-approaching deadline to pay an $83.3 million penalty in E. Jean Carroll’s civil defamation case.
Carroll’s attorneys argued that Trump’s request “boils down to nothing more than ‘trust me.'”
Trump’s next move
If Trump does attempt to sell assets to meet his undertaking, he won’t have much time to get it done.
He would have to hire a broker to market his properties, and any deal would have to close to free up the cash to use toward a bond, said Neil Pedersen, owner of New York-based bond agency Pedersen & Sons.
“There could be opportunistic buyers approaching him as well,” Pedersen noted.
So far, Trump has given no indication that he is moving in that direction.
“There are no sales planned or contemplated,” Kise told CNBC in an email before Singh’s ruling. “So no appraisers hired, no steps taken, etc.”
The Trump Tower on 5th Avenue is pictured in the Manhattan borough of New York City on April 18, 2019.
Caitlin Ochs | Reuters
After Singh ordered Trump to pay the full penalty, Kise and Trump’s other attorneys did not reply to questions about whether they were now preparing to sell off properties.
Coffee said Trump “can very likely” get a loan to help him meet his undertaking. That’s in part because Singh temporarily halted another penalty that would bar Trump from applying for loans from New York registered lenders.
Moreover, said Coffee, Trump is well-known within New York financial circles, so he is “not going into a market with strangers.”
“The real problem is, can he give the banks enough collateral that they’re satisfied?”
Talley agreed. “There is a lot of ‘dry powder’ out there — not just with banks, but also in non-banks,” he said.
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Republican presidential candidate, former U.S. President Donald Trump speaks during a Fox News town hall at the Greenville Convention Center on February 20, 2024 in Greenville, South Carolina.
Justin Sullivan | Getty Images
They also say Trump can’t simply post a cash deposit — at least not in his New York civil business fraud case, where he is facing $454 million in fines and interest alone.
“No one, including Jeff Bezos, Elon Musk and Donald Trump, has five hundred million laying around,” Trump’s attorney Chris Kise told an appeals court judge last week.
But legal experts say there’s another option that Trump’s lawyers haven’t mentioned in the court filings: Trump could offer up some of his properties as collateral to borrow what he needs — potentially from private equity sources.
There are “lots of private lenders out there in the debt markets and private equity markets that could lend” to Trump, said Columbia University law professor Eric Talley.
“In all cases, the loans would probably have to be secured with Trump properties, but if there is enough equity in some of them, he should be able to obtain secured credit, even on a compressed timeline,” Talley said.
In this courtroom sketch, former U.S. President Donald Trump looks on as his attorney Alina Habba delivers closing arguments during E. Jean Carroll’s second civil trial in which Carroll accused Trump of raping her decades ago, at Manhattan Federal Court in New York City on Jan. 26, 2024.
Jane Rosenberg | Reuters
The professor underscored the irony of Trump using his real estate to fight a lawsuit in which he was found liable for fraudulently inflating his property values for financial gain.
Any loans “would themselves involve making declarations of the value of the property — and that of course is what got him into this mess to begin with,” said Talley.
But accurately appraising the value of Trump’s assets is not a serious obstacle. As Trump’s lawyers noted during the fraud trial, the institutions that have lent him money already have conducted their own analyses of Trump’s finances, and did not rely solely on the claims at issue in his financial statements.
A more important factor could be whether Trump’s real estate assets are already mortgaged, said law professor John Coffee.
“He would have to come up with clean real estate property that is not already securing something that some other bank has a lien on,” Coffee said.
“Does he have that property? I can’t tell you.”
As of late January, the Trump Organization comprised 415 entities, according to a retired federal judge tasked with monitoring the company’s finances.
Of those, Jones identified 70 operating entities that generate revenue. That includes long term leases of buildings like 40 Wall Street, commercial office space on 13 floors of the 58 story Trump Tower, and the Trump National Doral Miami resort.
View leading into Trump National Doral in Miami, Florida on April 3, 2018.
Michele Eve Sandberg | AFP | Getty Images
In New York City, the value of Trump’s real estate holdings totals $690 million, according to a September 2023 estimate by Forbes. And some of the most prominent buildings that bear Trump’s name in the city are largely owned by other entities.
New York Attorney General Letitia James, who brought the fraud case, said she would seize Trump’s real estate assets if he cannot pay his civil penalty.
“There’s absolutely no reason for the New York attorney general to be kind and gentle to him if he doesn’t post the bond,” Coffee said.
Trump said in a deposition last year that he had “substantially in excess of $400 million in cash.” But his lawyers claimed last week that, if Trump is forced to secure the full $454 million penalty, “properties would likely need to be sold to raise capital under exigent circumstances.”
They instead offered to post a $100 million bond, but New York appeals court Judge Anil Singh rejected the proposal.
Unless a full appeals court reverses Singh’s decision, Trump has until March 25 to post an “undertaking” — cash or bonds — covering the entire penalty in order to stop it from taking effect during his appeal.
Trump has also asked a federal judge to delay another fast-approaching deadline to pay an $83.3 million penalty in E. Jean Carroll’s civil defamation case.
Carroll’s attorneys argued that Trump’s request “boils down to nothing more than ‘trust me.'”
If Trump does attempt to sell assets to meet his undertaking, he won’t have much time to get it done.
He would have to hire a broker to market his properties, and any deal would have to close in order to free up the cash to use toward a bond, said Neil Pedersen, owner of New York-based bond agency Pedersen & Sons.
“There could be opportunistic buyers approaching him as well,” Pedersen noted.
So far, Trump has given no indication that he is moving in that direction.
“There are no sales planned or contemplated,” Kise told CNBC in an email before Singh’s ruling. “So no appraisers hired, no steps taken, etc.”
Trump Tower on 5th Avenue is pictured in the Manhattan borough of New York City, New York, U.S., April 18, 2019.
Caitlin Ochs | Reuters
After Singh ordered Trump to pay the full penalty, Kise and Trump’s other attorneys did not reply to questions about whether they were now preparing to sell off properties.
Coffee said that Trump “can very likely” get a loan to help him meet his undertaking. That’s in part because Singh temporarily halted another penalty that would bar Trump from applying for loans from New York registered lenders.
Moreover, said Coffee, Trump is well known within New York financial circles, so he “not going into a market with strangers.”
“The real problem is, can he gives the banks enough collateral that they’re satisfied?”
Talley agreed. “There is a lot of ‘dry powder’ out there, not just with banks but also in non-banks,” he said.
Euronews Business takes a closer look at what investments are most likely to yield in the new year, amidst various uncertainties in the global economy.
2023 was a roller coaster of a year for the markets, fuelled by rate-cut expectations from the US, the UK and Europe, global tensions erupting in the Middle East and, not least of all, disappointing news from China’s economy.
The best bets of 2023 seemed to be made around the tech sector**, led by giants such as Nvidia** and Alphabet benefiting from their AI prospects, while cryptocurrencies and stocks of weight-loss drugs have also had huge gains in 2023.
But what is the best bet for 2024?
European equities and crypto are expected to rise while commodities could be among the most disappointing investments in 2024, according to BCA Research’s outlook. It believes AI may also lose some of its steam.
A mixed global outlook may drive investors’ hands
A key driver of investment decisions this year is when leading central banks the US, the UK and the Eurozone are expected to cut rates.
“Growth stocks in particular are likely to keep benefiting from this renewed enthusiasm given that they have suffered in a higher interest rate environment,” Head of Money and Markets at Hargreaves Lansdown Susannah Streeter told Euronews Business.
“Hopes for a softer landing for the US economy could also help companies selling discretionary products in the US market. However, given that the full impact of interest rate hikes is yet to be felt, there is still a chance that it’ll be a bumpy way down from peak rates.”
Others forecast a lot murkier outlook for the global economy, the growth of which has been around 3% in the last two decades. However, output is expected to fall lower for the longer term, as the main contributor to the global economy, China, is battling a serious property crisis within its own economy.
Dhaval Joshi Chief Strategist at BCA Research told Euronews Business that no sector could replace entirely the missing output of the $100 trillion Chinese real estate market, which is worth a staggering six times the $18 trillion Chinese economy.
“The end of China’s housing boom means the end of the world’s main growth engine,” said Joshi. “So it’s at least 25% and that’s been the main engine of Chinese growth, but that’s also been the main engine of world growth.”
The chief strategist expects that demand for commodities will be hit hard by the slowing growth of China. “It’s going to be a much, much tougher environment for commodities, at least for the next year, because the big source of demand is just not there anymore and new demand is simply not enough to fill the gap from China.”
Global efforts of decarbonisation, which requires lots of metal, could partially make up for the loss.
Meanwhile, oil prices are expected to climb in the short term. “Hopes of a soft landing for the US economy has seen [oil prices] edge back up and if OPEC+ nations extend production cuts, it’s likely to gain more ground,” said HL’s Susannah Streeter.
BCA agrees with the short-term spike, though it puts it down more to the geopolitical tensions in the Middle East. It sees no persistent threat of higher prices in the longer term. “The already weak demand will collapse if the price is too high,” explained Joshi.
What is 2024 holding for the US economy?
BCA Research expects a sharp slowdown in US growth. This is partly because real interest rates have only come into positive territory over the past six months. That rise is going to hit businesses which had previously benefited from negative real interest rates when inflation was higher than the Fed’s benchmark rates.
BCA expects that the central bank will have to cool down the economy, to cool down the prices.
“If you really want to kill inflation and keep expectations anchored at 2%, then the low point is not 2, it has to be more like 1.5% or so. And it’s very difficult to get there without a recession,” said Joshi.
It may hit businesses hard, as well as consumption – the latter propping up two-thirds of the US economy. Household spending has painted a rosy picture so far but, Joshi said, a massive inflow of illegal immigrants in 2023 gave a false reading of the overall numbers.
“While real consumption increased by 2.4%, the population increased by about 1.2% or so. If you look at consumption per head, it’s not that good.”
If the US economy is showing signs of slowing, the stock market could also be facing a setback, with certain companies’ profits downgraded.
Bonds and European equities could be the winner of 2024
On the other hand, the economic downturn may favour bond investments across the US, UK and Eurozone. “It’s very positive for the bond market in 2024,” said the chief strategist.
In its 2024 report, BCA suggests that European equities could be the winner of the next 6-12 months.
Joshi puts his bets on healthcare companies’ performance, among other consumer staples stocks, which had underperformed in 2023. Switzerland’s MSCI index, which didn’t do well in 2023, is also expected to outperform in 2024.
Hargreaves Lansdown’s Susannah Streeter said: “Highly cash-generative businesses are a good basis for a diversified equity portfolio. Companies which have taken on a lot of borrowing to grow are always riskier than those who are flush with cash. With recession risks clouding the prospects for some European countries, this strategy is one to keep in mind.
Turning from gold to ‘digital gold’
Cryptocurrencies are going through a transformation.
For a long time, they were considered a high-risk investment but investors recently took them as a hedge against risks for events such as a banking crisis, a role that has long been identified with real gold.
“What we’re finding is that a lot of investors are very slowly diversifying from sort of physical gold to, what I call, digital gold,” said Joshi. “It’s also a generational thing. Anyone above the age of 50, doesn’t like digital gold, anyone in their 20s or 30s, says: ‘I am very, very comfortable with digital gold. I don’t want physical gold.'” Joshi explained.
How the AI mania may deflate
“The AI gold rush will struggle to find any gold,” writes the BCA report.
Tech stocks banking on the future success of AI had been soaring in 2023. However, the report notes that real productivity that contributes to economic growth is yet to be demonstrated. The one company that could really benefit from the AI mania is Nvidia “selling the picks and shovels” to those companies in a gold rush for AI, said Joshi. “But the tech companies that are buying the picks and shovels are struggling to find any gold.”
BCA’s overall recommendation is to keep more investments in long-duration bonds, Swiss equities and French luxury goods’ stocks but favour less cash (except for dollar, which is recommended) and energy or industrial metal-related investments.
Disclaimer: This information does not constitute financial advice, always do your own research on top to ensure it’s right for your specific circumstances. Also remember, we are a journalistic website and aim to provide the best guides, tips and advice from experts. If you rely on the information on this page, then you do so entirely at your own risk.