Former President Donald Trump is currently appealing a fraud judgment, and there is a claim from a former federal prosecutor that an insurance company, Knight Specialty Insurance, will not be able to post a $175 million bond while the case is being appealed. This claim was made in response to attorney Dave Kingman, who stated that Knight Specialty Insurance would not be able to fulfill this requirement for Trump. According to the attorney general of New York, Letitia James, if the bond cannot be posted, she will have the ability to initiate enforcement actions against Trump’s properties. The court in New York dismissed Knight Specialty’s filings, citing the need for additional documentation regarding the funding source.
However, the company has since submitted new documentation on April 4. In order to prevent James from commencing enforcement proceedings, Trump must post the $175 million bond, as he was fined $454 million in February for falsely inflating the value of his assets. The former federal prosecutor, Eric Lisann, expressed on X (formerly Twitter) that Knight Specialty may not be able to fulfill this requirement for Trump, and if that is the case, the company will be held responsible for the entire amount since it provided the court with a guarantee.
“Looks like there is a real possibility that this Don Hankey-owned Knight Specialty Insurance does not itself have liquidity, and did not get from Trump collateral, sufficient to provide legally cognizable assurance that it can pay $175 million on demand in the event of a judgment-affirming appeal,” he said. “Thus, NY AG James looks to be soon greenlit to execute on her $450 million judgment against Trump as if Trump posted no bond.”
“But the Trumpian part is that even though, or perhaps because, it may be part of a Trump scam, Knight now too may be on the hook for $175 million as it won’t automatically get out from underneath its own proffered surety,” he added.
Hankey, the billionaire, has previously declared that his company will have the capability to transfer the funds to Trump. In response to attorney Dave Kingman’s statement on X, which claims that Knight won’t be able to provide the $175 million, it is acknowledged that Knight Specialty is facing difficulties. The approval of this bond is not feasible. As per the Civil Practice Laws and Rules (CPLR), the surety is bound by the bond until a replacement bond is submitted. It is unlikely that Trump will receive a new bond. He stated, “Trump won’t have a stay [on enforcement] AND Knight Spec will be liable.”
The question remains whether Knight Specialty, based in Delaware, can post the bond in New York. In April 2020, the AM Best rating agency upgraded Knight’s financial strength rating from B++ (Good) to A- (Excellent). According to AM Best, the rating at that time was, “These ratings reflect Knight’s strong balance sheet strength, as assessed by AM Best.”
To safeguard his assets while appealing the civil fraud ruling against him, Trump posted a $175 million bond on April 1. Previously, New York Judge Arthur Engoron held Trump, his adult sons Donald Jr. and Eric, as well as The Trump Organization, accountable for a scheme in which the value of Trump’s assets and net worth were fraudulently inflated to secure more favorable business deals. Trump, the presumed GOP presidential candidate for 2024, has repeatedly asserted his innocence.
After deducting interest, Trump’s penalty amounted to approximately $454 million. In order to prevent the state from seizing his numerous real estate holdings, he would have been required to post a bond slightly higher than that amount. However, last week, an appeals court ruled that he could instead pay a smaller bond of $175 million. Shortly after it was submitted, the court filing system rejected the bond due to missing documents, such as a “current financial statement.”
