State of New York vs Trump, et al - the civil fraud case against the Trump Organization

[andersweinstein]

From above thread. Whoa, if true:

[chancery]

https://iapps.courts.state.ny.us/nyscef ... sccBGwbw==

PLEASE TAKE NOTICE that, pursuant to CPLR § 2506(a), Plaintiff the People of the State of New York, by Letitia James, Attorney General of the State of New York, hereby takes exception to the sufficiency of the surety to the undertaking given by Defendants and denoted as Bond No. SA300588 (“Bond”), issued by Knight Specialty Insurance Company (“KSIC”) (a nonadmitted carrier) without a certificate of qualification pursuant to Insurance Law § 1111, upon appeal to the Appellate Division, First Department, filed on April 4, 2024. See NYSCEF No. 1707.

PLEASE TAKE FURTHER NOTICE that, pursuant to CPLR § 2507, Defendants or KSIC shall file a motion to justify the surety within ten (10) days of the service of this notice, failing which the Bond shall be without effect, except that the surety shall remain liable on the Bond until a new undertaking is given and allowed.

[raison de arizona]

The whole thing never made sense, why would tfg secure the bond with cash, as he claims? If he has the cash, why not put it up and save what is likely millions in bond fees?

[chancery]

New York AG questions if $175 Million Bond Insurer Can Save Trump

https://www.thedailybeast.com/new-york- ... save-trump

The New York attorney general on Thursday called into question whether the company that swooped to post a $175 million bond for former President Donald Trump is actually good for the money—or is even allowed to operate in the state.

The aggressive move by AG Letitia James came after Knight Specialty Insurance Company—a relatively unknown entity with tangential political connections to the former president—was forced to reveal its finances.

On Thursday, Trump’s lawyers posted paperwork listing the finances behind two companies—Knight Specialty Insurance Company and another entity named Knight Insurance Company LTD—which together claim to have assets totalling $2.7 billion. However, only the first of those two is actually listed in the court documents as agreeing to front the money if Trump loses the case.

Knight Specialty Insurance Company alone doesn’t have the “surplus” listed in financial statements to meet the capital requirements for posting the bond. New York law limits how much money state-regulated surety companies can post on a single bond to 10 percent of what’s referred to as the firm’s total “capital and surplus.”

In a midday court filing, the Knight Speciality Insurance Company revealed that it currently only has $138 million in “surplus.” That means the bond it has decided to post for Trump smashes through the 10 percent barrier, topping a whopping 127 percent of the company’s dedicated reserves.

But just before the new paperwork was filed, Knight Specialty Insurance president Amit Shah told CBS that the company has a novel theory as to why the state capital requirements don’t apply to their firm: because Knight Insurance isn’t even registered to operate as a surety in New York.

"Knight Specialty Insurance Company is not a New York domestic insurer, and New York surplus lines insurance laws do not regulate the solvency of non-New York excess lines insurers," he told CBS.

But they do regulate who can write a surety appeal bond.

State insurance regulators limit how much money a surety company can promise to pay, given the risk inherent in suddenly owing a huge sum. It’s akin to the way financial regulators keep banks solvent: by stopping them from overleveraging themselves.

Thursday’s filing raises serious questions about the risk to New York state. Knight Specialty’s “capital and surplus” has remained even lower than its current $138 million in the past four years, according to an assessment by a government-created Texas nonprofit that tracks these types of figures. Knight Specialty had $57 million available in 2020, $80 million in 2021, and $101 the following year, according to the Surplus Lines Stamping Office of Texas.

The explanation that Knight Specialty Insurance isn’t subject to the capital requirements because it’s not a New York company subject to the state’s solvency rules raises even more questions as to why Trump would opt for a firm that isn’t even licensed by New York’s Department of Financial Services.

Shah, the Knight Specialty Insurance president, also asserted to CBS that his company has more than $1 billion in “equity,” though the financial statement issued Thursday only shows the firm with $26 million in “cash and bank deposits” and $483 million in stocks and bonds. In fact, the “total admitted assets” amounts to $539 million—roughly what Trump might be forced to eventually pay for committing bank fraud when all the interest is tallied up.

The situation has bond industry experts noting that Trump—who was desperate for the cash and couldn’t find a company willing to put itself on the hook for the entire half billion dollars bank fraud judgment—has now shown himself relegated to an obscure firm that doesn’t seem well positioned to take on the risk, according to two bond industry experts who spoke to The Daily Beast on condition of anonymity.

What’s more, Knight Specialty had initially failed to provide this data—and only did so after New York court clerks rejected the company’s original bond posting and ordered it to correct the paperwork.

The error was first made public by Jeffrey K. Levine, an attorney who represents one of the AG’s key witnesses that testified during the bank fraud trial about Trump’s penchant for lying on his own financial statements, one-time Trump confidante Michael Cohen.

"At this venture, with so much at stake, to make these kinds of mistakes, it's almost unthinkable. And it amps it up with the missing financial statement. that adds all the drama,” Levine told The Daily Beast.

Levine probably said "juncture," not "venture." Alas for the days when publications had copy editors.

[raison de arizona]

Letter from AG office requesting two modifications to the Monitoring Order.

► Show Spoiler

https://x.com/MeidasTouch/status/177599 ... 01279?s=20

The NY AG believes that Trump and Weisselberg may have withheld evidence during the civil fraud case and are asking the Court to authorize the Court-appointed Monitor to investigate and report back.

[raison de arizona]

In Trump's civil fraud case, Justice Engoron schedules a hearing later this month on the sufficiency of the surety bond.

[Foggy]

[keith]

Alas for the days when publications had copy editors.

[MN-Skeptic]

A miscellany of additional posts by Dave Kingman, Esq., whose twitter follower count has now risen from 78 to 126 132.

He now has 297 followers!

[andersweinstein]

Couple more comments I found interesting from everybody's favorite Met:

The Times is reporting that Justice Engoron has scheduled a hearing for the 22nd "to discuss the bond". I don't understand what he's doing. Trump or Knight have to move to justify the bond. They have the burden of proof. There should not be a hearing until they make a motion.

https://x.com/DaveKingman8/status/1776023356401193330

Also, responding in another thread:

Trump/the surety get an opportunity to argue that the bond should be accepted. The court can order that the requirement that the surety be a NY-authorized insurer be waived. There's no compelling reason for the judge to reach that decision, but Trump gets a shot.

https://x.com/DaveKingman8/status/1776034545629856221

[Foggy]

Yeah, I don't know why the judge would schedule a hearing when they haven't filed a motion. If I'm following along here (and I admit it rained on my scorecard again and I can barely see it, but anyway), that $175M bond is not filed, or it's filed but it's no damned good. The clerks kicked it back at least once, but Trump submitted it again, with no evidence that the company can do business in New York.

I love the company spokesman who said they don't have to obey NY laws because they're not licensed in NY.

But then Ms. James filed her notice that I think automatically takes the bond out of play. I think that means the bond is not accepted by the court until after Trump’s lawyers file a motion and win it.

So the bond is out, or maybe it's in limbo or purgatory or sumpin'.

And if'n there's no bond, there's nothing preventing Ms. James from executing on the judgment. No, that's probably wrong. Ninety percent of what I write is wrong, of course.

[tek]

Law textbooks are being furiously rewritten before our very eyes

[p0rtia]

...or burned....

[andersweinstein]

Yeah, I don't know why the judge would schedule a hearing when they haven't filed a motion.

I think Engoron just wants to ask:

[Sam the Centipede]

And if'n there's no bond, there's nothing preventing Ms. James from executing on the judgment. No, that's probably wrong. Ninety percent of what I write is wrong, of course.

I assume Ms James and her team are content to play a long game. No need to rush, the screw turns, the clock ticks. Make sure the exception and other motions are well drafted and filed on time, the outcome will take care of itself, and it won't be pretty for the Trump gang.

[andersweinstein]

So the hearing is set April 22, but looks to me like the 10-day deadline to file justification would be April 14, which I think gets bumped to business day April 15, start date of his criminal trial. Big day for Donnie!

[zekeb]

So the hearing is set April 22, but looks to me like the 10-day deadline to file justification would be April 14, which I think gets bumped to business day April 15, start date of his criminal trial. Big day for Donnie!

It's the day Donnie will lie on his tax returns, too.

[raison de arizona]

So the hearing is set April 22, but looks to me like the 10-day deadline to file justification would be April 14, which I think gets bumped to business day April 15, start date of his criminal trial. Big day for Donnie!

It's the day Donnie will lie on his tax returns, too.

Donald Trump said he’s “smart” by not paying income taxes — and argued that if he did, the money would be “squandered.”

https://www.cnbc.com/2016/09/26/trump-b ... smart.html

[Tiredretiredlawyer]

https://www.upi.com/Top_News/US/2024/04 ... 712348966/

U.S. NEWS
N.Y. AG skeptical of Donald Trump's bond posting that one legal expert calls 'financial chicanery'

New York Attorney General Letitia James has called Donald Trump's $175 million bond posting into question, despite a corrected submission. A former assistant in the attorney general's office tells UPI the posting is deficient for a number of reasons.


This is not the only issue with the bond, according to Adam Pollock, managing partner of the New York law firm Pollock Cohen LLP. Pollock is a former U.S. assistant attorney general, serving in that role until 2017.

"This bond is further financial chicanery in a trial about financial chicanery," Pollock said. "This judge is going to have little patience for a flawed bond."

Pollock told UPI that it is encoded twice in New York law that a bond must be written by a New York licensed insurer. This license is granted by the New York Department of Financial Services.

The financial statement, which was missing in the original bond filing, must also demonstrate that the insurer has at least 10 times the bond amount in surplus capital. In this case, that threshold is $1.75 billion.

Knight Specialty Insurance's statement shows $138 million in surplus capital. That is less than the $175 million bond, let alone far less than the amount required by New York law.

"The state doesn't want one insurance company writing for more insurance than it can guarantee," Pollock told UPI.

Knight Specialty Insurance also enclosed a consolidated statement of all of the related companies, stating they combine for a surplus of about $1 billion.

[RTH10260]

New York Attorney General Letitia James has all reasons to have this bond posting done correctly, with dotting the i's and crossing the t's. If she does not she will have a hell of a time collecting any money owed.

[zekeb]

New York Attorney General Letitia James has all reasons to have this bond posting done correctly, with dotting the i's and crossing the t's. If she does not she will have a hell of a time collecting any money owed.

Collection may still be problematic. The bond was lowered to what - one third of the amount of the judgement?

[raison de arizona]

"This judge is going to have little patience for a flawed bond."

Bullshit. The judge will extend him every courtesy. tfg will get plenty of chances to rectify the situation. Delay delay will win again.

[RTH10260]

New York Attorney General Letitia James has all reasons to have this bond posting done correctly, with dotting the i's and crossing the t's. If she does not she will have a hell of a time collecting any money owed.

Collection may still be problematic. The bond was lowered to what - one third of the amount of the judgement?

In a discussion upthread it was mentioned that the appeals court may have found a flaw in the ruling and calculation of fines and restitution amount. The bond value is said to be near what the final ruling might be expected.

[Sam the Centipede]

Another wrinkle in the bond issue, from ProPublica, via Mary Trump's newsletter: Trump’s Lawyers Told the Court That No One Would Give Him a Bond. Then He Got a Lifeline, but They Didn’t Tell the Judges.

[Trump's] lawyers had told the appellate court it was a “practical impossibility” to get a bond for the full amount of the lower court’s judgment, $464 million. […] But before the judges ruled, the impossible became possible: A billionaire lender approached Trump about providing a bond for the full amount.

The lawyers never filed paperwork alerting the appeals court. That failure may have violated ethics rules, legal experts say.

Probably not a biggy in the context of all the poo-flinging, but it's perhaps something for Ms James to punt at an appropriate point, if she wishes to emphasize bad faith from Trump's legal wranglers.

[RTH10260]

Another wrinkle in the bond issue, from ProPublica, via Mary Trump's newsletter: Trump’s Lawyers Told the Court That No One Would Give Him a Bond. Then He Got a Lifeline, but They Didn’t Tell the Judges.

[Trump's] lawyers had told the appellate court it was a “practical impossibility” to get a bond for the full amount of the lower court’s judgment, $464 million. […] But before the judges ruled, the impossible became possible: A billionaire lender approached Trump about providing a bond for the full amount.

The lawyers never filed paperwork alerting the appeals court. That failure may have violated ethics rules, legal experts say.

Probably not a biggy in the context of all the poo-flinging, but it's perhaps something for Ms James to punt at an appropriate point, if she wishes to emphasize bad faith from Trump's legal wranglers.

Personally I don't see any wrong in this to keep quiet about negotiations with an uncertain end.