By Dareh Gregorian—
NBC News
Donald Trump claims his brand alone is worth more than $10 billion, but a pair of civil verdicts could wreak financial havoc on him, legal experts said.
A jury last month ordered the former president to pay $83.3 million to writer E. Jean Carroll for defaming her, and he faces the prospect of another verdict in the coming days that could dismantle parts of the company from which his wealth comes.
That combination “would be a devastating financial blow” and could “have a significant impact” on his wealth, said Chris Mattei, an attorney who has handled similar cases.
Trump campaign spokesman Steven Cheung said Trump “built the largest properties in the world and an unparalleled and wildly successful business.”
He also called the cases against him a “witch hunt.”
“Unfair verdicts will be appealed and all deceptions will be defeated, as President Trump did nothing wrong and the truth will prevail,” Cheung said.
Here's a look at the financial tsunami Trump faces:
Former President Donald Trump leaves Trump Tower on January 16, 2024. David Dee Delgado / Bloomberg via Getty Images file
How much does Trump owe Carroll?
Trump received an $83.3 million verdict on Jan. 26 for repeatedly defaming the writer and has said he plans to appeal as soon as possible.
In fact, Trump's legal team is already appealing a $5 million verdict Carroll won against him last year for sexual assault and defamation.
Does Trump have to pay while he appeals?
The appeal could delay Carroll from collecting his money for several years while the court process continues.
But that doesn't stop Trump from getting the amount.
Under federal court rules, civil defendants must post collateral for awards while they appeal, and in New York state, that includes a 9% annual interest rate.
In the case of the $5 million compensation, Trump had to deposit $5.5 million in a judicial fund: 111% of the judgment amount.
Given the amount of the second award, Trump could try to use bail instead of paying the full amount, but that could still be very costly because bail bond companies can collect up to 5% of the judgment amount.
For Trump, that nonrefundable fee would be about $4 million, and he would still have to come up with a large amount of cash and collateral to secure the bond.
[An appeals court determines that Trump lacks immunity in criminal proceedings for electoral interference]
“No one is going to give Donald Trump bail for $83 million unless the full amount is guaranteed,” said Ron Kuby, a New York attorney.
“It would be crazy,” he added.
How Much Could You Owe in the New York Attorney General's Civil Fraud Case?
When New York Attorney General Letitia James first sued Trump, his company and his top executives in 2022, she sought $250 million in damages for “repeated fraud” centered on Trump's financial statements.
Last month, she increased the amount to $370 million.
Trump and his company have denied any wrongdoing and maintain that the case is politically motivated.
Judge Arthur Engoron is expected to issue his decision on how much Trump should pay next week, but he has already found that Trump and his executives have committed repeated and persistent fraud, which does not bode well for the former president's team.
What happens if Trump appeals?
Trump has already said he would appeal if Engoron rules against him, but he will still
most likely have to pay the full amount.
David Slarskey, a business litigation attorney, said the New York state court, like the federal court, requires a surety or bond and that, given the likely size of the award, Trump will likely take steps to obtain one. bail.
If James gets the $370 million he seeks, it could cost Trump up to $18 million in non-refundable bail bonds.
And with the 9% interest rate, the amount of money he would have to contribute would be in the range of $400 million.
Mattei, who represented the families of victims of the mass shooting at Sandy Hook Elementary School in Connecticut in their successful defamation lawsuit against far-right conspiracy theorist Alex Jones, said that if Trump and his company receive a trial that exceeds its ability to pay, the company “could declare bankruptcy.”
Another possibility would be to liquidate assets to raise cash, a move the attorney general's office would monitor to make sure she is not holding onto assets “for her own use and not for that of creditors,” Mattei added.
Adam Leitman Bailey, a New York real estate lawyer who has sued Trump before, said he would most likely have to pay 10% of the judgment in cash and use the property as collateral for the remaining amount.
“He is running for president of the United States.
He’s not going anywhere,” he added.
Kuby indicated that any bond company would also ask for full collateral for that appeal.
“It would be almost four times crazier than doing it for $83 million with no guarantee,” he said.
If he loses his appeals, Carroll and the attorney general would be entitled to receive their entire sentences, plus interest accrued before the appeal was decided.
If Trump wins, he could get back all the money he contributed, plus interest.
But he would lose whatever he had to pay to the bail bond company.
How much money does Trump have?
According to a 2021 financial disclosure statement submitted as evidence in the fraud case, Trump had about $293.8 million in “cash and cash equivalents.”
Prosecutors said that figure was artificially high and included $93 million in assets that are illiquid.
The declaration, which was prepared during the pandemic, puts his net worth at $4.5 billion, a figure that Trump considers too low.
“We didn't include billions of dollars in brand value,” Trump said of his financial statements in an October 2022 statement. “If I wanted to show you a good statement, I would have added maybe 10 billion or something like that for the brand.”
A report last month by the watchdog Engoron appointed to monitor the Trump Organization's financial dealings said the trust that holds the company's assets had quietly transferred an amount of cash to Trump.
“I was not informed of cash transfers from the trust to Donald J. Trump, each exceeding $5 million and totaling more than $40 million, until my team conducted a review of the trusts' bank statements. accounts of that fund,” explained the supervisor, Barbara Jones, on January 26 in a letter to the judge.
Kuby said that given the allegations in the New York attorney general's case, bond companies would likely want to do their own assessments and reviews of Trump's financial information.
Can Trump use campaign money to pay sentences?
Trump has been using money from political action committees (PACs) that support his re-election campaign to pay his legal bills.
More than $50 million last year alone, according to his latest campaign filings.
One of those PACs,
Save America
, started 2024 with just $5 million, which wouldn't affect any of the grants.
Mattei said that if Trump wants to use more money from his campaign or his donors — or start a legal defense fund — he would have to be transparent about what he is doing.
“What is important is what he is revealing to his donors about how the money can be used.
"Money contributed to PACs that support him can be used for legal defense purposes, but
it is questionable whether it could be used for personal lawsuits
," he added.
What would the ruling mean for the Trump Organization?
The company that is intertwined with Trump is made up of hundreds of smaller companies.
The supervisor who monitors its financial dealings said in her court filing that it comprises 415 different business entities.
The attorney general's lawsuit sought to cancel the certificates of an unspecified number of companies that benefited from the fraud scheme and that were controlled or owned by the former president.
Engoron approved that request in a ruling before trial and applied it to other current and former top executives at the company, including Donald Trump Jr., Eric Trump, former Chief Financial Officer Allen Weisselberg and former Senior Vice President Jeff McConney.
He also ordered that a supervisor be appointed to monitor the dissolution of limited liability companies (or LLCs).
It is unclear whether the order applies only to LLCs or if it would also apply to properties tied to them.
The judge has said he will address the issue in a later order.
Slarskey said dissolution could “effectively be a death sentence for the corporation” and would “presumably trigger a liquidation procedure.”
Dissolutions, coupled with a lack of cash on hand, could lead to defaults on properties that still have loans on them, and “that can take on a life of its own," Slarskey added. "It triggers one default, which triggers another default, which triggers another non-payment,” he explained.
Trump already appealed Engoron's order on the certificates, and an appeals court halted the dissolutions until it hears Trump's case.
Trump: My finances are solid
In a post on his social media platform Truth Social on Monday, Trump said he is on firm financial footing.
“Commercial properties are under DEFAULT AND LITIGATION all over the world, except my properties where the loans have been PAID IN FULL, no defaults, excellent and powerful financial statements with a strong protection clause, and the NYSAG [New York Attorney General] “You are suing me for loans from very happy lenders,” he wrote.
“This case should, for the good of our country, be dismissed.”