Editor’s note (Feb. 26, 2024): This article was originally published on Feb. 23, 2024 and has been updated with more recent developments. Klasfeld’s reporting is part of Just Security’s Trump Trials Clearinghouse.
Now that a judgment has been signed forcing him to pay roughly $450 million in a civil fraud judgment, former President Donald Trump may be in a hurry to blunt the impact of the ruling on appeal.
With each passing day, Trump accrues more than $100,000 in interest under the terms of Manhattan Supreme Court Justice Arthur Engoron’s order. The judge rejected Trump’s attempt to stay enforcement of the judgment on Thursday.
“You have failed to explain, much less justify, any basis for a stay,” Engoron wrote in an email to the Trump family’s attorney, Clifford Robert, on Thursday, turning the eyes of court-watchers to the imminent appeals process.
Even if Trump finds a bond company willing to guarantee a surety on appeal — or the former president manages to post a slightly larger amount in cash — interest will continue to tick up daily over the course of an appellate process that could drag on for years. Litigation is quite likely to extend well past the 2024 election.
In this primer, we answer common questions about appellate procedures and we attempt to explain how Trump may try to stop enforcement of the order, which has other significant consequences for him than just financial ones.
Given the civil fraud case’s complicated political backdrop and high profile, some aspects of the appeal — including the timing to Trump’s ability to secure a bond — could be difficult to predict. We will continue to revisit these questions as the process develops.
1. What can Trump do to temporarily stop enforcement of the order?
Under New York Civil Practice Law and Rules, Trump has multiple paths to delay the enforcement of the order. The former president can seek a court’s permission for what is known as a stay, likely from New York’s Appellate Division, First Department, or he can obtain an automatic stay by posting “an undertaking in that sum” — that is, the full judgment, including interest.
Finding that money may not be easy for Trump should he go the all cash route.
As of last year, the New York Times estimated the former president’s liquidity at $350 million in cash and cash equivalents. That is less than what Trump owes in disgorgement of “ill-gotten gains” for his civil fraud ruling alone, before factoring in interest on that judgment and the second E. Jean Carroll verdict of $83.3 million. (He has already posted an all cash bond for the first Carroll verdict of $5 million.) Even crediting Trump’s self-reported estimate of his liquidity at “substantially in excess” of $400 million, the combined judgments and interest would wipe out these reserves — and then some. If a Bloomberg estimate is accurate, Trump has about $600 million in liquid assets, just enough to cover the cascading civil judgments to date, but depleting that cash so dramatically may further compromise his ability to obtain loans for his business.
To post cash in lieu of a bond, as Trump has done before on a far lesser scale, appellants typically must front more than the amount of the judgment. His ability to do so would raise questions about where he obtained that money. Courts would allow him to make that payment without questioning the source of the funds.
2. Will Trump be able to get a bond?
After a federal jury ordered Trump to pay $5 million to E. Jean Carroll for sexual abuse and defamation, the former president raised eyebrows in the legal community by deciding to post cash in lieu of bond in June 2023. That decision forced Trump to front about 110 percent of the judgment on appeal, leading some legal experts to question whether he had difficulty obtaining a supersedeas bond, which stays enforcement of a judgment pending appeal.
“I’ve never seen anyone put up millions in cash when they could get a bond,” said Mitchell Epner, a former federal prosecutor who has spent more than 25 years as an attorney.
Since such a bond would typically force a litigant to put up between two and three percent of the judgment — depending on whether the bond is collateralized — it would have forced Trump only to part with roughly $100,000 of his cash instead of $5.5 million.
Two months later in August, Trump retained a bond company in Georgia to post bail bonds — in the amount of $200,000 for all of the charges — in his criminal racketeering for election interference in Fulton County.
Concerns by some in the bond community about working with Trump in the wake of a nine-figure fraud judgment have only been amplified — and not simply because of the evidence that emerged about the inflation of his assets over a 43-day trial.
“I don’t think anybody has a real idea of what assets are available,” said Neil Pedersen, who runs a bond company in New York.
There is an additional level of uncertainty if Trump returns to the White House and loses his appeal.
“Let’s say hypothetically we issue the bond for Trump today, and all of a sudden, a year or two years down the road, there’s an issue with that bond and we then have to sue Trump,” added Pedersen, noting that surety companies tend to be “risk-averse.”
Though Pedersen’s company is registered with New York’s Department of Financial Services, he doubted that fact would prevent Trump from working with a company like his, despite the fact that the court’s order when effective will preclude loans from DFS registrants. That is because surety bonds are not loans.
3. What happens if Trump gets a stay?
Without a stay, New York Attorney General Letitia James would be able to seek to collect her judgment in any jurisdiction where Trump has assets, an outcome Trump could prevent by posting a bond or obtaining an order temporarily preventing her from doing so.
A stay could also pause other parts of the order that severely restrict Trump and his family’s ability to do business in New York State.
Well before trial began, Justice Engoron put the Trump Organization under the watch of a court-appointed monitor: former federal judge Barbara Jones. Justice Engoron extended her monitorship by at least three years and authorized her to install an independent director of compliance within the company. Trump cannot serve as an officer or director of that or any other New York corporation for three years, and his sons Eric Trump and Donald Trump Jr. cannot do so for two years. For three years, Trump, his company, and its affiliates cannot get loans from any financial institutions chartered by or registered with New York’s Department of Financial Services, the chief regulator in the financial capital of the world.
Depending on the scope of any order for a stay, Trump may be relieved from any or all of the effects of the order until the end of the appeal (except for the gathering interest on the judgment were he to lose on appeal).
4. What is Trump’s deadline for an appeal?
Trump has 30 days to appeal from the date of the judgment’s formal entry. He may move faster than that, as his lawyers anticipated an adverse ruling.
Note: Just days after the publication of this article, Trump’s attorneys Alina Habba and Clifford Robert filed a notice of appeal to New York’s Appellate Division, First Department, challenging “each and every part of the judgment” unfavorable to the defendants.
Since Trump has not yet posted a bond, there is no automatic stay of enforcement as the appeal progresses at this time. The 30-day clock lapses on a Sunday, giving Trump an extra day to post the bond on Monday, March 25, the anticipated start date for his first criminal trial in Manhattan.
5. What might Trump argue on appeal?
There is little mystery to some of Trump’s appellate arguments because he has another appeal pending from an earlier ruling by Engoron in this same case. That’s the separate partial summary judgment ruling on one count prior to trial. That appeal is currently pending before New York’s Appellate Division, First Department. In broad strokes, Trump’s attorneys argue that his financial statements are not fraudulent because asset valuations are subjective — and the major banks and insurers that received them, like Deutsche Bank and Zurich, performed their own due diligence. The Trump attorneys’ regular refrain is that the case has “no fraud,” “no victims,” and “no reliance” by the financial firms, a proposition that the lower court repeatedly rejected.
The judge found that Trump deceived these financial institutions by providing them false information about his properties that led to the inflation of those assets by billions of dollars. For example, the Trump Organization valued Mar-a-Lago as a personal residence when its deed restricted its use as a social club, used a fraudulently low market capitalization rate that dramatically inflated the value of 40 Wall Street, and estimated his New York penthouse at nearly three times its size (until Forbes reported on that on the discrepancy in 2017).
Though it is undisputed that Trump never defaulted on the loans — and the banks made money on the deals — the judge made clear that the state did not have to prove otherwise, and the attorney general’s counsel emphasized the case was not “victimless.” According to the ruling, Deutsche Bank awarded Trump low interest rates based on his false statements of financial condition, a key factor for a substantial portion of the penalty. The state’s expert estimated that the German lender lost $168 million from Trump’s deception, a number the judge accepted.
Trump would face a heavy burden trying to disturb that factual record on appeal, which will be reviewed under the onerous “clear error” standard and supported by more than a decade of internal records, dozens of witnesses, many adverse credibility findings of defendants and defense witnesses, and 43 days of proceedings summarized in a 92-page ruling. Those included determinations about the credibility of the witnesses, including Trump, his adult children and his former business associates. Eric Trump’s credibility, the judge found, was “severely damaged” by his denying knowledge of his father’s financial statements, despite emails showing him discussing them. Jeffrey McConney also “severely impaired” his credibility because he “obfuscated and equivocated” about his working relationship with a real estate executive on an appraisal for Trump’s skyscraper 40 Wall Street. Trump himself “severely compromised” his credibility by refusing to answer questions. Such remarks by a trial judge are usually granted deference on appeal. Acknowledging this hurdle, some conservative legal commentators like former federal prosecutor Andrew McCarthy have anticipated that Trump may have better odds pinning hopes on reducing the award on appeal — instead of outright eliminating it.
Before the trial began, Trump’s attorneys tried to halt the proceedings by attacking the attorney general as biased and claiming the case was barred by the statute of limitations. The appellate court rejected those arguments, even if Trump and his attorneys have not abandoned them. They have complained about the judge, his principal law clerk, and a gag order barring Trump and his attorneys from disparaging courtroom staff — to no avail.
In the view of many legal experts, Engoron protected his ruling by reversing the portion of his partial summary judgment decision that was the most vulnerable on appeal: the so-called corporate death penalty, in which he had previously ordered the cancellation of business certificates of Trump’s New York business empire. An investigation by The Associated Press found little precedent for that decision, which was stayed by the appeals court and has now been retracted. In other words, the one issue that offered Trump the greatest hope of some vindication on appeal has now been taken off the table.
After an intermediate level of appellate review, the appeal would go to the New York Court of Appeals, the state’s highest court, and then Trump could attempt review by the U.S. Supreme Court. There is no set timeline for this process, but a recent annual report from the Court of Appeals estimated that a civil appeal takes 18 months on average to course through the state’s judiciary. The length of the U.S. Supreme Court review would depend upon whether the justices take up the case, and as the process unfolds, Trump’s possible penalty grows by nearly a tenth every year. The Trump Organization’s lenders and business partners would receive frequent reminders of the company’s possible peril, particularly if the appeals are not going the former president’s way.