New York Attorney General Letitia James will have to explain why her challenge to Donald Trump's $175 million bond was not taken "unnecessarily and for vexation," a judge has ruled.
Judge Arthur Engoron set an April 22 hearing after Trump's legal team filed a large amount of paperwork on Monday to prove that Knight Specialty Insurance Company (KSIC) was legally permitted to post the bond for Trump.
If Trump wins the case on April 22, James will have to pay the costs of the former president reapplying to the court with new bond paperwork.
Even if Trump wins, the amount awarded would be a tiny fraction of the $454 million penalty Engoron forced Trump to pay following a successful fraud lawsuit by James' legal team.
In February, Engoron found Trump, his sons Donald Jr. and Eric, and the Trump Organization liable for a scheme in which the value of Trump's net worth and assets were unlawfully inflated to obtain more favorable business deals. Trump has denied all wrongdoing.
The former president received a penalty of about $454 million, after interest, and would have had to pay a bond slightly higher than that amount to stave off the state from seizing his assets, including his many real estate holdings, to cover the penalty. An appeals court later ruled that he could instead pay a lower bond of $175 million.
James sought an "exception" to Trump's $175 million bond, which under New York law means a challenge to his validity.
On Tuesday, Engoron issued a written brief requesting submissions from James on "why an order should not be made" to accept Trump's bond and also "granting the costs incurred by this application upon the ground that the exception has been taken unnecessarily and for vexation."
He said that James must file opposition papers by April 19.
Engoron also wrote that, on April 22, he may grant "such other and further relief as this court deems just and proper."
In a filing on April 15, both Trump and KSIC claimed James wrongfully objected to Donald Trump's $175 million bond.
After a court fined Trump $454 million in February over illegally inflating the value of his properties, the presumptive 2024 GOP presidential nominee had to post the bond to stop James from seizing his assets.
James argued in court documents on April 4 that KSIC was not admitted to practice in New York.
KSIC and Trump filed a large number of documents to show that Knight had the financial backing to issue the bond and that Trump had fully supported the bond with cash.
Their joint statement, filed to Judge Arthur Engoron on Monday, said KSIC's $175 million bond was collateralized by the $175,304,075.95 Trump had placed in a Charles Schwab bank account and which was specifically pledged to KSIC.
Newsweek reached out to Trump's attorney and James' office for comment via email on Wednesday.
In the court filing, Trump and Knight Specialty said James was wrong to claim that Knight should not be able to act as a surety. The lawyers requested that the court set aside James' objection and force her office to pay the "costs incurred by this application."
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Sean O'Driscoll is a Newsweek Senior Crime and Courts Reporter based in Ireland. His focus is reporting on U.S. law. ... Read more
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