What may happen if Trump can't secure $464M bond in New York fraud caseFormer President Trump has until Monday to post a $464 million bond to appeal New York's fraud case against him or else New York Attorney General Letitia James may begin to collect the court-ordered damages in the case.
Why it matters: Trump's lawyers said this week securing a bond that size has been "impossible" after they approached more than two dozen companies and none were willing to cover the amount.
Trump has denied any wrongdoing in the case.
The latest: James took a first step toward seizing Trump's properties by filing judgements on March 6 in Westchester County, according to the county clerk's online database.
It suggests James may seek to seize and sell the Trump National Golf Club Westchester or his Seven Springs private estate north of Manhattan to help fulfill the judgement.
What does this indicate about Trump's finances?
Trump's lawyers said no company would accept his real estate as collateral and would only accept cash or cash equivalents.
Trump's inability to secure a bond under those terms at the very least suggests he lacks access to a large amount of liquid assets.
This may in part be because he posted a nearly $92 million bond earlier this month to appeal the $83.3 million in damages he was ordered to pay writer E. Jean Carroll for defamation by denying her sexual assault allegations.
What is a bond?
In this case, it's a guarantee that the money for the damages will be available in case Trump's appeals ultimately fail.
Typically, a defendant hoping to appeal legal damages will approach companies to post the bond on its behalf in exchange for a fee that's a percentage of the total bond amount.
The bond is usually covered by cash or other liquid assets presented by the defendant as collateral. Real estate is rarely accepted as collateral because of the lengthy appraisal process and its value being influenced by market fluctuations.
The bond allows defendants to exhaust their legal options while protecting the court from frivolous appeals. It also shields plaintiffs from dishonest tactics to delay payment and from the defendant's financial situation.
What's next: If the appeals fail, the defendant will be required to pay the judgment. If they can't, the plaintiff may collect the damages from the bond company and the defendant would be required to reimburse the company.
If a defendant wins the appeal and the damages are overturned or reduced, the company still retains the fee.
Why is Trump's appeal amount so high?
Trump's bond is nearly half a billion dollars because he was ordered to pay nearly that amount in damages and interest after being found liable for financial fraud for falsifying business records.
New York law requires defendants in civil cases to post a bond worth at least 110% of the judgment amount to delay paying the penalty as they appeal.
Since Trump is on the hook for $454 million in the civil fraud lawsuit, his appeal bond is $464 million.
What they're saying: Trump's lawyers said securing that is a "practical impossibility" because only a very few companies would accept a bond of that amount.
The only ones that would accept the bond require collateral worth approximately $557 million in the form of cash or cash equivalents and would charge nearly $20 million in fees, his lawyers said.
What happens if Trump can't pay?
James could have started collecting on the damages after the judgment was imposed in January, but she gave Trump and his co-defendants a 30-day grace period to arrange a bond or prepare to pay the judgment.
If the grace period ends on March 25 without a bond posting, James will be entitled to collect.
She could begin seizing and selling Trump's properties to fulfill the judgment. James has said she would do so if he can't pay, though actually doing so could be politically contentious.
It would also be legally complex given the tangled structure and financing used by his businesses.
James could also give Trump more time to pay the damages or arrange a lower amount through a counterproposal.
Besides the bond, what can Trump do?
Trump has asked an appeals court to pause collecting on the judgment while he appeals or to accept a much lower bond of $100 million. However, it's not certain the appeals court will rule before the March 25 deadline.
If it rules against Trump, he could appeal to the state's highest court, but there's no guarantee he would be able to prevent James from collecting if he did so.
Trump could come up with the liquidity needed for the bond collateral by selling one of his properties, though such a fast sell would likely come with major financial losses.
He could also have the businesses implicated in the case declare bankruptcy, which would prevent James from collecting but would significantly damage his reputation and could ignite more litigation over corporate debts.
Context: Considering some of Trump's companies had a string of bankruptcies in the 1990s and early 2000s that nearly financially ruined him, it's unlikely his companies will file for bankruptcy again.
While Trump campaign fundraising committees have started using the bond deadline and the potential property seizures in donation requests, it won't help with the bond or judgement.
One appeal to supporters said, "Keep your filthy hands off of Trump Tower," in response to James' threat to seize Trump's properties to pay the judgment.
The Federal Elections Commission allows certain campaign funds to be used to pay for legal expenses, but using funds to pay a bond or a judgement would likely violate campaign finance laws.