In order to appeal Justice Arthur Engoron's sanctions in New York State Attorney General Letitia James' civil fraud case, Donald Trump needed to come up with a $175 million bond. And he found it from Don Hankey, an 80-year-old billionaire known for his work in the subprime loans space, and his Knight Specialty Insurance Company.
The bond doesn't necessarily mean that Trump will get out of paying the sanctions, but it buys him some time and at least gives him a chance to appeal the judge's decision.
The bond has brought a great deal of scrutiny to Hankey and Knight Specialty, and some of it comes from the Daily Beast's Jose Pagliery in a report published on April 8.
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According to Pagliery, the bond is "troubling" for various reasons.
"The little-known insurance company that rescued Donald Trump by providing a last-minute $175 million bank fraud bond isn't just unlicensed in New York; it hasn't even been vetted by a voluntary state entity that would verify it meets minimum 'eligibility standards' to prove financial stability," Pagliery explains. "Perhaps even more troubling, the legal document from Knight Specialty Insurance Company doesn't actually promise it will pay the money if the former president loses his $464 million bank fraud case on appeal. Instead, it says Trump will pay, negating the whole point of an insurance company guarantee, according to three legal and bond experts who reviewed the contract for The Daily Beast."
One of the Beast's interviewees was N. Alex Hanley, known for expertise on how companies appeal huge judgements like the one Trump is facing.
Hanley said of the $175 million bond, "This is not common…. The only reason this would be done is to limit the liability to the surety."
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Similarly, appellate litigator Maria T. Vullo told the Beast, "There are many questions here, and that short piece of paper gives very little comfort. I believe this paper isn't worth much, and there are more shenanigans behind it."
According to Vullo, Knight Specialty "is providing a bond that is one-third of its total assets and greater than its surplus, which is incomprehensible for a carrier to underwrite."
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Read The Daily Beast's full article at this link (subscription required).
