(DailyChive.com) – New York Attorney General Letitia James had been pressing the judge to cancel Trump’s $175 million bond in his civil fraud case, claiming that the insurer lacks sufficient funds to back up the bond. However, Trump’s team and the prosecution reached a deal on the morning of April 23 that allowed the bond to stand.
A California-based firm, Knight Specialty Insurance Company (KSIC), owned by a multi-billionaire Trump supporter, Don Hankey, posted the $175 million bond to stop New York authorities from seizing Trump’s properties in the civil fraud case.
James argued that New York insurance regulators do not permit the KSIC to write bonds in the state. James also mentioned that KSIC has not even issued a surety bond in the last two years and does not have any money to back it up.
James’ filing also stated that the New York law only allows small businesses to take on liabilities within the 10% margin of their policyholder surplus. Since the KSIC has a policyholder surplus of $138 million only, the filing continued, it can write liabilities up to $13.8 million, which is significantly lower than the $175 million bond it posted.
The filing also mentioned that KSIC management has previously violated federal law, so the firm cannot act as a guarantor in the Trump case. The AG also asked the court to disregard KSIC’s financial summary, claiming that the company is involved in “shadow insurance” practices that allow it to artificially increase its surplus.
According to the filing, the judge should immediately void the bond and ask the defendant to post a replacement bond. Judge Arthur Engoron did not void it, though, and approved an agreement between both sides that allowed the bond to remain in effect.
Last year, the court found that the former president and his organization inflated their net worth to secure favorable financial deals.
The court initially ordered Trump to post a $464 million bond, but his lawyers argued that they approached nearly 30 insurers and found it practically impossible to secure this amount, which resulted in the judge lowering the bond.
Trump has maintained that all charges against him are politically motivated and pleaded not guilty to all counts.
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