'Bond without effect': Trump warned Letitia James poised to grab assets as deadline nears

Former President Donald Trump and his legal team are reportedly running out of time to post the bond for appealing his civil fraud trial verdict before New York Attorney General Letitia James starts seizing his assets, according to a prominent real estate attorney.

Attorney Paul Golden, who is a partner at the New York-based law firm Coffey Modica, told Newsweek on Tuesday that if he doesn't have a satisfactory bond by Monday, James' office could begin the asset seizure process as soon as next week.

James previously threatened to use the legal authority of the state to satisfy the $464 million judgment against Trump that Judge Arthur Engoron handed down in February.

"Presumably, if the motion fails, the Attorney General will take the position that the bond is without effect and that the Attorney General may start to take collection efforts," Golden said.

"Of course, if for whatever reason a court rules the bond is without effect, then Trump would likely appeal that decision as well, and possibly seek a stay in the context of that separate appeal too."

READ MORE: 'They can go after any assets': AG James to seize Trump's bank accounts before real estate

While New York state law requires that appealing a judgment requires a litigant to post bond equal to the judgment itself plus 9% interest, an appeals court stepped in at the last minute and allowed Trump the ability to post a much lower bond of $175 million. The former president was able to get a bond secured by Knight Specialty Insurance Company in order to prevent James' office from seizing his assets.

However, James filed a motion last week to impose a 10-day deadline on KSIC to meet state regulations for bond guarantors, or else she would deem the $175 million bond to no longer be in effect. According to Axios, the bond paperwork Knight submitted was incomplete, and Knight was not registered with the New York Department of Financial Services, which is a requirement for any guarantor of a bond within the Empire State. It also didn't include a corporate financial statement that showed the guarantor has the resources necessary to pay the bond.

Golden said if the bond were indeed deemed to no longer be in effect, James would effectively be in uncharted legal waters.

"There is little case law on this particular subject, so it becomes hard to predict what factors a court would consider when deciding if KNIC was truly solvent, and could ultimately afford to pay off $175 million," he told Newsweek.

READ MORE: Letitia James issues 10-day ultimatum to company that guaranteed Trump's $175M bond

KSIC is chaired by billionaire Don Hankey — a longtime Trump supporter who built his wealth in the subprime auto loan industry and has a long history with both Trump and his real estate empire. One of Hankey's companies, Westlake Services, was sued by the Department of Justice for illegally repossessing 70 debtors' cars.

"That's all a part of the game to Hankey, who carved out his $7.4 billion fortune through those kinds of predatory practices, targeting low-income customers with high-interest auto loans," Ellie Quinlan Houghtaling of The New Republic wrote. "Hankey's Knight Specialty Insurance Company is the group that underwrote Trump's bond for his civil fraud trial, but it’s not Hankey's only investment in Trump's financial situation. "

"Hankey is also believed to be the largest shareholder in Axos Financial, according to MSNBC’s Lisa Rubin — a financial institution that, in 2022, refinanced more than $50 million of Trump's loans on Trump Tower and Trump National Doral Miami, according to documents filed with the Office of Government Ethics," she added.