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An appellate court decision reducing former President Donald Trump’s bond to $175 million was a win for the former president — and certainly a rare one, according to legal experts.
After being ordered to pony up his $454 million judgement following his New York civil fraud trial last month, Trump had told the court he could not secure a bond for that amount.
But the former president was tossed a last-minute lifeline Monday when an appeals court ordered a whopping 62% reduction in the size of the bond. He has 10 days to pay up.
Neil Pedersen, the owner of surety bond agency Pedersen & Sons, told Business Insider that in his company’s 30-year history, he and his employees have handled thousands of bonds.
In that time, he’s only heard of roughly a couple dozen instances when a New York appeals court reduced an appeal bond — and those involved far lower judgments.
“It’s extremely rare,” Pedersen said.
Appellate judges are reluctant to let the losers of lawsuits essentially offer IOUs — instead of a collateral-backed bond — while an appeal progresses, experts explained.
Should Trump lose his appeal down the road, he’ll owe the full amount almost immediately. And New York Attorney General Letitia James will be left chasing him for the remainder.
Eric Snyder, the bankruptcy chair of Wilk Auslander LLP, who routinely enforces judgments in New York, told BI he’s never seen a bond get reduced like this.
The court might feel comfortable that Trump will be able to pay the judgment if he loses his appeals, Snyder said.
He added that Trump wouldn’t easily be able to sell shares in his properties given a prospective buyer would see a record of the judgment. Plus, Trump Tower is in New York — making it within reach of the Attorney General’s power if payment comes due.
Snyder added that the court’s decision to reduce Trump’s bond could suggest that it may later lower the total penalty he’ll owe.
“It might be an indication it’ll get reduced on appeal,” he said.
While the lowered bond buys Trump time, he’ll still owe the entire sum if he loses on appeal. As part of Monday’s decision, Trump is required to file a full appeal argument in time for the court’s September 2024 session.
And for every day that passes, the amount owed will continue to accrue interest — to the tune of roughly $112,000 per day.
That means Trump could end up owing New York well over a half-billion dollars when all is said and done, Pedersen said.
“Once his appeals are exhausted, he’ll only have five to ten days to satisfy the judgment, or whatever amount of the judgment is affirmed,” Pedersen said.
Following a three-month trial, New York Supreme Court Justice Arthur Engoron found Trump and other Trump Organization executives liable for the nearly half-a-billion dollar penalty last month. Engoron found they had conspired to inflate the value of their real estate assets to dupe lenders.
Speaking to reporters Monday, Trump applauded the appellate court’s decision to lower his bond.
“It will be my honor to post,” he said, adding that it would be in “cash.”
