00:00 Here's your Forbes Daily Briefing for Friday, March 22nd.
00:05 Today on Forbes,
00:07 Why seizing Trump's assets, like Trump Tower, won't be quick or easy.
00:14 On Monday, Donald Trump's lawyers revealed in a legal filing that Trump had failed to
00:18 secure the $464 million appeals bond he needs to avoid paying the half-billion-dollar penalty
00:26 as he appeals the New York civil fraud judgment against him.
00:29 His lawyers said that about 30 different bond companies turned down the former president's
00:33 request.
00:35 Trump is now asking the five-judge appeals court panel to pause enforcement of the civil
00:39 judgment or to lower the bond amount to $100 million while the appeals court hears his
00:45 case.
00:46 Trump is running out of time.
00:48 New York Attorney General Letitia James has said that her office plans to collect from
00:52 him this Monday, March 25th.
00:55 Unless Trump is able to obtain an appeals bond before then, New York prosecutors and
01:00 law enforcement could initiate a wide-ranging action to freeze and then seize Trump's assets.
01:07 Forbes estimates that Trump has about $400 million of cash in liquid securities, but
01:11 some of that money is already encumbered—that is, not available.
01:15 Earlier this month, Trump obtained a $91.6 million appeals bond for the civil judgment
01:21 against him in which he was found liable for defaming and sexually assaulting E. Jean Carroll.
01:26 MSNBC reported that in order to obtain that bond, Trump posted a Charles Schwab brokerage
01:31 account as collateral.
01:33 Those same funds cannot be used to collateralize a second bond.
01:37 Trump's attorneys say their client needs collateral of $557 million to post the $464
01:44 million bond.
01:46 Forbes spoke to a few lawyers with experience in these matters to find out what could happen
01:50 next.
01:51 Kevin O'Brien, a white-collar trial lawyer in New York and a former assistant U.S. attorney
01:56 to the Department of Justice, says, "I think he is in trouble.
02:01 He doesn't have the cash to pay for this.
02:03 That's why he's in the pickle he's in."
02:05 Mark Zauderer, a trial and appellate lawyer in New York, says that if Trump fails to get
02:10 his bond or get a favorable ruling from the appellate judges, then the Attorney General's
02:14 office will move swiftly to take control of Trump's bank and brokerage accounts, as
02:19 well as his various buildings and real estate holding companies.
02:23 He says, "You do everything.
02:25 You go after everything at once.
02:27 Some assets will take longer than others."
02:31 Spectators can expect a long and drawn-out series of legal filings and appeals over a
02:36 period of weeks, months, and possibly even years.
02:39 O'Brien explains that the Attorney General is "not going to take a stake and drive
02:44 a sign through the front yard that says, 'This building has been seized.'
02:47 It's a legal process.
02:49 It's not like she's going to be selling these properties next week."
02:53 To initiate the process of seizing property, the New York Attorney General's office can
02:57 put liens on Trump's assets and then give execution orders to county sheriff's offices
03:02 to sell any Trump-owned properties in their counties through an auction.
03:07 Trump has stakes in 13 New York properties that are collectively worth about $700 million
03:11 after debt.
03:12 Ten of those assets are in New York County, which encompasses Manhattan.
03:17 Two properties are in Westchester County, a golf course and a mansion, and another golf
03:21 course is in Dutchess County.
03:24 Under liquidation proceedings, Trump's other creditors, which all lent Trump money against
03:28 his New York buildings, will also demand what they're owed, potentially complicating the
03:33 process.
03:34 Then there's tax authorities owed money by Trump who will want their share.
03:39 For these reasons, James may start by liquidating buildings that are unencumbered or even wait
03:44 to sell some or all of the properties.
03:46 Paul Golden, a New York lawyer specializing in real estate and commercial litigation,
03:51 says, "One theory is that the Attorney General will not actually sell any of Trump's real
03:56 property until the appellate process was complete.
03:59 There would likely be complicated litigation if the Attorney General sells real property
04:03 at a public auction now for well under the market value, only to later discover that
04:08 the end result was that Trump was not liable at all."
04:12 There are other mechanisms for the Attorney General's office to squeeze money out of
04:16 Trump's buildings, like taking payments from tenants that lease space from Trump.
04:21 Extracting cash flow from Trump's properties would further imperil Trump's ability to service
04:25 his massive debt pile.
04:27 Over the next five years, he has $780 million in mortgages coming due.
04:34 For full coverage, check out John Hyatt's piece on Forbes.com.
04:39 This is Kieran Meadows from Forbes.
04:41 Thanks for tuning in.
04:42 [MUSIC PLAYING]
04:46 [MUSIC PLAYING]
04:49 [MUSIC PLAYING]
04:52 (upbeat music)
Comments