Donald Trump's $175 Million Bond Drama, Explained
Donald Trump was hit with a massive fine in a fraud verdict for the civil case brought by New York Attorney General Letitia James. He was being required to post nearly half a billion dollar bond while the case was under appeal to stop his assets being seized or his accounts frozen. However, his lawyers said he wouldn't be able to do so and that none of the many companies they'd approached to pay the bond had agreed to pay. An appeals court then ruled that the bond amount could be reduced to $175 million, which Trump said he could pay in cash. But some problems have come to light with this bond.
The bond was not posted by Trump alone — it was underwritten by Knight Specialty Insurance Company out of California, headed by billionaire Don Hankey. Before the bond amount was reduced, Hankey had reportedly said he would be willing to pay the full amount and had even talked to people around Trump about that possibility. If Trump's lawyers knew about the offer and didn't tell the court, that could be an ethics violation.
The bond was initially not accepted as it was missing required parts of the paperwork. However, those mistakes appear to have been corrected now, and the bond has been accepted. Yet and still, the drama continues.
Donald Trump's bond looks suspicious to some
Even with the missing information provided for Donald Trump's bond in his civil fraud case, New York Attorney General Letitia James still has concerns with Knight Specialty Insurance Company, the California company that posted the bond. She filed paperwork on April 4 that stated she didn't think Knight Specialty Insurance Company was qualified to post the bond in New York nor did they have the money to back it up. The argument seems to be that thereare some New York state regulations and restrictions around bonds that this company doesn't meet.
It doesn't stop there. Traditionally, a bond means that the company underwriting it would be on the hook for the cash if, in this case, Trump doesn't win his appeal of the ruling and the former president doesn't himself pay the fine. However, the bond paperwork from the California company said that, no matter what, Trump would be the one paying the money, as reported by The Daily Beast. If Knight Specialty Insurance Company doesn't have the cash to pay and wouldn't ever be paying any money with Trump's case, it does seem to beg the question as to how and why they're involved. "This is not common," legal expert N. Alex Hanley told The Daily Beast. "The only reason this would be done is to limit the liability to the surety."
Donald Trump's bond underwriter might be wishing they'd charged a higher fee
Don Hankey, CEO of Knight Specialty Insurance Company and Donald Trump supporter, told CNN that Trump had used cash as collateral for the bond, and there hasn't yet been public comment from him about the other potential issues with the bond. Hankey hasn't given up the details about what fee he charged Trump for posting the bond. However, it sounds like he might be regretting not asking for more. "We thought it would be an easy procedure that wouldn't involve other legal problems and it's not turning out that way," Hankey told Reuters in early April 2024. "We probably didn't charge enough."
The judge on the fraud case, whom Trump has lashed out against in the past, has scheduled a hearing on the bond issue for April 22. That may put an end to the bond conversation; however, given how many ups and downs this case has had so far, it may not be over yet. If a bond isn't secured, Trump faces having assets seized by the state of New York, and if he doesn't win his appeal, he will be expected to pay the full amount of the fine plus interest.