The New York attorney general’s office is raising questions about the $175 million bond Donald Trump posted in the civil fraud case and has asked for more information to prove it’s financially sound.
Trump filed the bond Monday night after gaining a reprieve from a New York appeals court that lowered the amount he needed to post from $464 million to $175 million. The lifeline gave Trump more time to obtain a bond after telling the court 30 underwriters refused to back a bond for nearly half a billion dollars.
The attorney general’s office, led by Democrat Letitia James, on Thursday took a step to challenge the soundness of the deal and filed a “notice of exception to the sufficiency of the surety” to seek additional information from Trump or the underwriter about the bond because the insurer is not regulated by New York state.
Judge Arthur Engoron set a hearing for April 22.
On Monday, California-based Knight Specialty Insurance Company agreed to underwrite the bond. Don Hankey, the chairman and majority shareholder of Knight Specialty Insurance, told CNN on Tuesday that Trump provided $175 million in cash as collateral for the bond.
Lawyers familiar with bonds say it’s fair for the attorney general’s office to want to understand the collateral used to support the bond. Trump can ask the judge to sign-off on Knight or pair Knight with another company that is authorized in New York.
“If they seek court approval of Knight Specialty, I believe that the attorney general will want proof that the company is actually holding the $175 million in cash collateral so the bond can be immediately paid if the judgment is affirmed without needing to wait to try to liquidate pledged assets,” said Bruce Lederman, an attorney with DL Partners, who has experience…
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