Stormy times for Trump

Posted on Feb 20, 2024. by NTI

New York Judge, Arthur Engoron, has ordered former US President and business tycoon, Donald Trump, to pay circa $355m plus interest to New York state. The order follows findings in September that Trump had fraudulently inflated his financial statements.

Sitting at the civil fraud trial of Trump on Friday 16th February, Judge Engoron, also disqualified Trump from doing business for three years in New York. In his 92 page judgment Engoron said “This is a venial sin, not a mortal sin,” that allowed the Trump businesses to keep operating “major activities that could lead to fraud”.

Whilst the judge dropped an earlier ruling to dissolve all the companies that Trump owns in the state that could have led to their liquidation, he did say that he could renew his call for “restructuring and dissolution” based on “substantial evidence”.  

The next Chapter?
Trump is no stranger to insolvency; his businesses have filed for Chapter 11 bankruptcy protection on 6 previous occasions. Unlike in the UK where bankruptcy represents the financial death of individuals, Chapter 11 of the United States Bankruptcy Code allows for struggling companies to reorganise their assets and debts. Chapter 11 (similar to Administration in the UK) usually allows the debtor to remain “in possession” and to possess powers of a trustee. Chapter 7 of the US Bankruptcy Code would result in Trump’s personal assets being sold to pay off his debts whilst Chapter 13 would allow Trump to enter into a “reorganisation” of his personal financial affairs and retain his assets. The next chapter in Trump’s eventful life remains to be seen.

Whilst the previous 6 bankruptcies were in respect of Trumps businesses, the latest judgment requires Trump to contribute personally. The order to pay $355 million could rise to $463.9 million in total. According to New York Attorney General Letitia James, who brought the case against Trump, “That represents $363.9 million in disgorgement, plus $100 million in interest, which will continue to increase every single day until it is paid,” she said in a press conference following Engoron’s judgment.

“Stormy” times
Last May, Trump was found liable for sexually abusing writer E. Jean Carrol in a department store changing room and ordered to pay circa $10m. Last month, Trump was ordered to pay $83.3m following the successful defamation case brought by the writer. These orders are not expected to lead to the bankruptcy of a man with an estimated net worth of $2.6bn. However, Trump is currently facing 91 criminal counts in four separate prosecutions including a criminal case set for March 25 where he is charged with falsifying business records to hide “hush money” to an adult film actress and a former Playboy model, Stormy Daniels. The other prosecutions involve allegations against Trump for election interference and “hoarding” classified documents after he left office.

Trump has previously bragged about how he has avoided personal bankruptcy, but with the recent judgments and the remaining litigation against him, this could change. The former Apprentice host remains in the firing line and it’s only a matter of time before he’s told “You’re fired!"

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