He didn’t go to jail or lose control of the race for the Republican presidential nomination, but a jury’s verdict in a civil defamation trial last week hit Donald J. Trump where it hurts: his wallet.
The jury’s $83.3 million award to E. Jean Carroll was ill-timed for the former president, who may soon face charges against New York Attorney General Letitia James (Letitia James) faces another hefty penalty in a civil fraud case. The family business is preparing to wait for a judge to impose penalties in the case that could amount to hundreds of millions of dollars in the coming weeks.
Taken together, the sentences could deliver a punishing one-two punch to the former president, a financial threat he hasn’t experienced in decades.
For a man with an estimated net worth in the billions of dollars, these payouts raise little fear of bankruptcy. And unlike his four criminal indictments, the payouts do not pose any risk to his liberty. But they could erode some of his property. A review by The New York Times of his financial records and interviews with people close to him revealed his financial cushion and forced him to sell various assets.
Both penalties will also strike at the core of Trump’s identity – and his ego – and test his approach to legal crises. For years, he has portrayed himself as a self-made tycoon who could tilt the justice system in his favor. As the cases against him mounted, he sought to blur his various legal woes into what he baselessly described as a “witch hunt” directed by political opponents.
“The Trump enterprise is not going to be brought down by a bunch of criminal cases,” said Steven M. Cohen, a former federal prosecutor and senior official in the attorney general’s office who now teaches corporate law at New York Law School Law. “The Trump enterprise is going to be torn apart by these civil cases and at some point is at risk of collapse.”
Ms Carroll’s verdict, Writers slandered by Mr. Trumpangering the former president, who called it “absolutely ridiculous!”
Mr Trump’s comments by Steven Cheung did not elaborate on how Trump would fund Carroll’s verdict or potential civil fraud trial penalties.
He said Trump had built “a very successful, unparalleled business” before he was elected.
“The unjust verdict will be appealed and all scams will be defeated because President Trump did nothing wrong,” he said.
In a social media post on Sunday, Trump addressed the attorney general’s accusation that he had inflated his net worth, writing: “I am worth much more than what appears on my financial statements.”
Big legal bills are not a new reality for the notoriously litigious Trump, but the numbers have never been higher.
He has been using a political action committee, initially funded by his false claims of widespread fraud in the 2020 election, to pay for much of his and some witnesses’ legal fees in the criminal case against him. Experts believe he could use it to help fund Carroll’s verdict, but only a fraction of the amount set by the jury.
That leaves Mr. Trump having to pay Ms. Carroll and the state’s expenses out of his own pocket.
People close to Trump insist he has enough money to cover both major expenditures. The people spoke on condition of anonymity to discuss his finances. testimony Last year, when dealing with Ms. James’ case, Trump said he had $400 million in available cash.
The New York Times reviewed years of Mr. Trump’s financial statements and court documents revealing his finances but was unable to independently verify the claims. Mr. Trump’s family business is a privately held company and is not required to file detailed public reports and regulators.
The latest financial disclosures he must file as a presidential candidate include ranges rather than specific numbers.
Still, public records and interviews with people with knowledge of his finances provide a snapshot that Trump has enough cash or financial market investments that can be converted into cash to cover the $83.3 million he now owes Carroll Miss.
Potential penalties from the attorney general may be another matter.
Ms. James is seeking $370 million in damages. During the months-long trial, Judge Arthur F. Engoron seemed sympathetic to her case.
If Trump were suddenly owed hundreds of millions of dollars, he might have to sell much of his investment portfolio or other assets.
When Trump entered the White House, his longtime finance chief, Allen H. Weisselberg, prepared a memo showing that the Trump Organization was low on cash. The group has $60 million, including more than $26 million tied up in one fund. A partnership beyond his reach.
For much of his presidency, annual financial statements filed by Trump’s companies with his lenders showed he had between $75 million and $93 million in cash and “cash equivalents,” depending on the year. Ms. James’s case. )
Since then, Trump’s companies have sold some once-prized assets: the license to operate his golf club in the Bronx and the lease he controlled at a Washington hotel. After paying off the mortgage and loan, he only received proceeds from the sale of the hotel. The pre-tax amount from other investors was $131.4 million, according to documents filed in Ms. James’ case.
In Trump’s post-presidential life, his business, the Trump Organization, has also struck new deals with foreign partners, including a Saudi-backed golf venture and a Saudi-based real estate company. To build housing and golf complexes in Oman.
It’s unclear what his company did with the money — whether it was cash in a bank account, invested in the stock market or used to fund Mr. Trump’s various businesses. Many of them lost money these years.
For now, Trump is not required to make immediate payments to Ms. Carroll and the state, although he is appealing both cases.
He can pay the court system, which will withhold the money while the appeal is pending. That’s what he did last year when a jury in a related case ordered him to pay Ms. Carroll $5 million.
Alternatively, Mr. Trump could try to obtain an appeal bond, which would prevent him from having to pay the full amount up front. This approach would essentially assure Ms. Carroll and Ms. James that Mr. Trump has the money to pay, but prevent them from collecting while his appeal is heard.
But to obtain such bonds, Trump would need to find a company willing to issue bonds at a time when he faces significant legal risks.
If he does get a bond, the amount likely won’t be cheap. Legal experts said the bond could be worth 110 per cent of the judgment, making it about $92 million in the case involving Ms Carroll. Mr. Trump also had to pay a substantial premium to the surety company and provide it with substantial collateral, even more than he owed. He also owes interest to Ms. Carroll and the state of New York.
Legal experts say Trump may not be able to put up his property as collateral and instead, the surety company may require him to pledge liquid assets such as certificates of deposit or Treasury bonds.
“This is not a walk in the park,” said Stuart Levine, a Baltimore business attorney who regularly handles various types of bonds for clients, after reviewing Trump’s latest financial disclosure form.
Mr. Trump’s net worth has long been a source of pride for the former president, although it can also be a double-edged sword.
On the final day of the recent trial, Ms. Carroll’s lawyers tried to convince the jury that Mr. Trump should face a stiff punitive fine — after all, for such a wealthy man, only large fines matter.
“He once said that his brand alone is worth $10 billion,” Carroll’s attorney Roberta Kaplan said in closing arguments, a remark that Trump was targeting. Published in testimony in the Attorney General’s case.
“He said it was the hottest brand in the world,” Ms. Kaplan continued, rattling off the estimated value of his Mar-a-Lago estate in Florida and his golf resort outside Miami. .
Trump’s attorney, Michael Madaio, objected, saying “these are not personal assets that she’s talking about,” suggesting they belonged to Trump’s companies.
He was overruled.
Jonah E. Bromwich and William K. Rushbaum Contributed reporting.