In the wake of the massive judgment against Donald Trump, many in New York are celebrating the prospect that the former president could be forced to sell off his property just to appeal the $355 million judgment against him. While Trump has good grounds to object to this excessive fine, he still has to come up with close to a half billion dollars just to make his arguments to the New York Court of Appeals.
In order to file an appeal, the courts require a deposit for the full amount of the damages or a bond covering the full amount. Even with escrow options, the call for cash or collateral can be enough to put some executives in a fetal position.
It can be challenging enough for many companies drained from years of litigation. For Trump, the demand for $355 million plus about $100 million in interest could force a fire sale on properties to pony up just the deposit.
Engoron has also decreed that Trump is not allowed to "do business" in New York, which includes borrowing from his previous lenders to pay the money for this bond.
In other words, Engoron has both levied an excessive fine against Trump, while simultaneously forbidding him from obtaining enough in loans to pay for the bond to protest the excessive fine.
Many of us have been critical of the ruling of Manhattan Supreme Court Justice Arthur Engoron who imposed the astronomical fine despite finding that Trump's "victims" not only did not lose a single dollar but made handsome profits. Indeed, these banks testified that they wanted to continue to do business with Trump as a "whale" client, but Engoron is now barring them from doing so.
Turley also writes that New York has essentially declared war on all real estate developers in New York.
Oscar Wilde wrote that "moderation is a fatal thing. Nothing succeeds like excess." Justice Arthur Engoron took that line to heart with his absurd imposition of $455 million in fines and interest against Donald Trump and his corporation.
The fine is $355 million, but he slapped on an extra, and very round figure of $100 million, for "interest."
You can tell he really ran the interest calculations to the seventh decimal by how incredibly round the number came out.
It succeeded wonderfully with New Yorkers, who celebrated the verdict like a popular public execution. It also worked wonderfully to make it difficult to appeal.
Much of the criticism of the decision focused on the unprecedented use of the law and the excessive size of the fine. The New York statute has been on the books for decades and has always been something of an anomaly in not requiring an actual victim or loss to justify disgorgement or fines.
Even the New York Times agreed that it could not find a single case in history where this statute was used against an individual or a company that did not commit a criminal offense, go bankrupt, or leave financial victims.
Engoron then combined that unprecedented application with an equally extraordinary penalty, which is greater than the gross national product of some countries.
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There is also an added inequity to Engoron's decision.
Under New York law, Trump cannot appeal this ruling without depositing the full amount, including interest, in a court account. Even for Trump, $455 million is hard to come by. Likewise, a bond would require a company to guarantee payment for a defendant who has been barred from doing business in New York and is facing the need to liquidate much of his portfolio.
Nothing succeeds like excess for judges like Engoron. By imposing this astronomical figure, he can make it difficult or impossible for a defendant to appeal, absent declaring bankruptcy or selling off assets at distress prices.
And who would want to loan Trump money to cover the bond? Anyone who loans Trump money would be the next to be prosecuted by "Tish" James for non-crimes.
This has created fear in the financial community that the everyday business practice of evaluating all of your properties at the highest possible level -- why would you want to admit your properties are worth less than some might be willing to pay for them? -- now makes them all potentially liable for half-billion dollar criminal fines.
The combination of the draconian fine and the threshold deposit for appeal has produced a shudder throughout the New York business community. The city is already experiencing an exodus of businesses and individuals from the top tax brackets. Rising crime, taxes, and eat-the-rich politics have made New York a hostile environment for businesses. At a time with rising costs from undocumented migrants, even Mayor Eric Adams is alarmed about the loss of his high earners.
Ah, but don't worry about New York going after all the other big businessmen who routinely evaluate their properties at the outer limits of plausibility -- Kathy Hochul admits that this is a political prosecution directed at one single political enemy and will never be used against anyone else.
Kathy Hochul tells NY businesses not to fear about Trump verdict: "Nothing to worry about"
The Hill:New York Gov. Kathy Hochul (D) addressed New York business owners in a new interview and told them there was "nothing to worry about" after former President Trump was hit with a $355 million fine and a ban on conducting business in New York for three years.
Hochul joined John Catsimatidis on 'The Cats Roundtable' on WABC 770 AM, where she was asked if other New York businesspeople should be worried that if 'they can do that to the former president, they can do that to anybody.'
'I think that this is really an extraordinary, unusual circumstance that the law-abiding and rule-following New Yorkers who are business people have nothing to worry about, because they're very different than Donald Trump and his behavior,' Hochul responded.
@amuse
@amuse
New York's Democrat governor assures real estate developers that they won't be targeted for real estate valuations like Trump. She just admitted it was a purely partisan political prosecution of Trump. h/t @JRobFromMN pic.twitter.com/IewoCboyuw
-- February 18, 2024
Hochul admits that this application of the law will not be applied to anyone except Trump. Therefore, this is an unconstitutional selective prosecution of a political enemy.
It must be overturned.
Note that Hochul is reassuring big businessmen in New York taking loans against their assets that she knows "everybody does it" -- evaluates their properties at highest potential value -- but that they shouldn't worry, they won't be prosecuted for it.
But Engoron specifically dismisses Trump's defense that everybody does it, that banks of course know that businessmen evaluate their properties at maximum possible value, and says that if "everybody does it," that just demonstrates the need for New York to prosecute EVERYBODY to stop the "fraud."
So the judge's ruling depends on prosecuting "everybody" who evaluates their property on the high side, but Kathy Hochul says don't worry, we're certainly not going to be prosecuting everyone who does this, just Trump.
Anyone else see a conflict there?
And everyone should stop investing in New York, period. New York is now announcing that they will confiscate hundreds of millions of dollars from anyone who does not follow the leftwing Marxist line.
Indeed, that seems to be what investor Kevin O'Leary recommends: