Trump's win in securing a bond for NY business-fraud case appears to be crumbling, turning into a loss as court rejects bond company's filing due to defects

(dailyboulder.com)

Earlier this week, Donald Trump seemed to nail down a major courtroom win when he secured an appeal bond in his New York business-fraud case. It  did not take long for Trump's bond to look, well . . . not so secure. And Trump's legal team did not help matters by flubbing standard courtroom procedure for handling related documents. For good measure, the supposed billionaire who helped secure the bond leads a company with some sketchy activity in its background -- and it apparently is not even licensed to engage in the surety business in New York.

In short, a big win for Trump now looks like it might turn into an even bigger loss, and as Liz Dye of the Above the Law (ATL) legal website explains, that's the way things tend to go when Trump gets involved in a transaction.  Under the headline "Trump NY Bond Just As Kosher As His Financial Statements; Everything Trump touches turns to LULZ," Dye provides background:

On Monday Donald Trump announced that he’d found someone to front the $175-million bond to stave off collections during appeal of the massive civil-fraud judgment won by the New York Attorney General. Apparently some rando billionaire from California, who made his fortune in subprime car loans, was willing to vouch for Trump through his company, Knight Specialty Insurance.

“I’ve just posted a 175 Million Dollar Bond with the sadly failing and very troubled State of New York,” Trump whined on Truth Social, adding that the civil-fraud case against him and his business was nothing but “a fabricated ELECTION INTERFERENCE con job, so bad for New York, where businesses are fleeing & violent crime is flourishing.” 

He complained that he’d “Also posted a 91 Million Dollar Bond on another New York Fake Case, money I can’t use on my campaign. Just what Crooked Joe wanted. WITCH HUNT!”

One explanation for this evolving mess is that Trump apparently has no clue how bonds work. His legal team, meanwhile, is proving to be of little or no use. Dye writes:

We might be tempted to make fun of Trump for not understanding how bonds work. Isn’t the point of paying Chubb to underwrite the note so that you don’t have to hand all your cash over to the State of New York? But engaging with Trump’s digital logorrhea as a representation of facts is like trying to assemble a jigsaw puzzle in an open sewer — you wind up with a lot of missing pieces and probably worms.

And anyway, who the hell understands what’s actually going on with the bond he’s supposed to have posted to stop Attorney General Letitia James from auctioning off Trump Tower to pay the judgment? Not us! And apparently, not Knight Specialty Insurance, either.

On Wednesday, the court rejected the bond because it had not one but three defects, including no attached financial statement from Knight.

Perhaps it hasn't been established that Knight is a "fly by night" outfit. But Dye is not convinced the company is on the "up and up" either. She writes:

The company duly amended its disclosure, but it’s not clear that the fix will help. As lawyers on Bluesky noted immediately, the language of the note appeared to guarantee that the defendants themselves would pay in the event of an unsuccessful appeal, not the guarantor, as provided by law.

There was also the pesky matter that Knight’s balance sheet shows just $26.8 million in cash on hand, and a net worth of just $138 million, both of which are substantially less than the $175 million the company claimed to be guaranteeing on Trump’s behalf.

And not to get too technical, but providing a surety bond requires a certificate of qualification from New York State Department of Financial Services under Insurance Law § 1111, and the NYAG is just wondering if Knight has got one.

Except for those minor details, everything seems to be going swimmingly for Trump's bond deal. Dye writes:

In comments to CBS News, Knight’s CEO Amit Shah seemed to suggest that the company was exempt from the surety capitalization requirements as an out-of-state entity.

“Knight Specialty Insurance Company is not a New York domestic insurer, and New York surplus lines insurance laws do not regulate the solvency of non-New York excess lines insurers,” he told the network. “So we don’t believe we need the 10% surplus.”

HUH.

 Well, that seems on the up and up! Surely Justice Arthur Engoron will be completely understanding about these unique financial arrangements at the April 22 hearing.