The paperwork for Donald Trump's $175 million bond was rejected by a court that determined key details were missing — and then New York Attorney General Letitia James challenged the "sufficiency" of the bond, saying that the surety backing it is not admitted in New York.
Now, unless the insurance company, Knight Speciality Insurance, can prove it can back the bond before Monday, he's facing a "world of hurt," according to a financial consultant.
Atlanta-based market economist Jon Gabrielsen said James could start seizing the cash in Trump's accounts if the bond is not posted by Monday's deadline.
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Trump posted a $175 million bond earlier this month to prevent the seizing of his assets while he appeals the $454 million (after interest) civil fraud judgment that was leveled against him for inflating his assets. The bond was later rejected.
According to Gabrielsen, Trump's businesses will cease to be solvent if the money for his business expenses is seized by James.
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"If his bank balances are of an amount that would cover the $175 million, I doubt [James] cares about the impact of her seizing them upon his company. And seizing cash is quick and easy compared to seizing properties, finding a buyer and doing all the procedures involved," Gabrielsen told Newsweek.
Since an appeals court lowered Trump's bond from around $454 million down to the $175 million figure, Gabrielsen says it might make it harder for Trump to negotiate if it turns out he can't come up with $175 million.
"The judge can just say: 'look, I already cut your bond in half, what more do you want from me?'" Gabrielsen said, adding that if James seizes cash from his bank accounts, he'll be in a "world of hurt."
"I honestly don't know what he has to do that would get him another bond," Gabrielsen said. "My sense is that he is already scraping the bottom of the bottom in terms of availed willing and capable sources."
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