Jury orders Donald Trump to pay $83.3 million in defamation case
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Trump could soon face over $400 million in legal penalties. Can he afford it?
Former President Donald Trump says his brand alone is worth over $10 billion, but a pair of civil verdicts could cause financial havoc for him, legal experts said. Trump was slapped last month with an $83 million award in the E. Jean Carroll defamation case and faces the prospect of another verdict in the coming days that could be multiples of that — while also dismantling parts of the company his wealth comes from. That combination "would be a devastating financial blow" and could "have a significant impact" on his wealth, said Chris Mattei, an attorney who has handled similar cases. Trump campaign spokesman Steven Cheung said Trump "built the greatest properties in the world and a tremendously successful, unparalleled business," and he called the cases against him "witch hunts." "The unjust verdicts will be appealed, and all the hoaxes will be defeated, as President Trump did nothing wrong and the truth will prevail," Cheung said.Here's a look at the fast-approaching financial tsunami Trump faces.
Trump was hit with an $83.3 million verdict on Jan. 26 for repeatedly defaming Carroll and has said he plans to appeal as soon as possible. He's already appealing a $5 million verdict Carroll won against him last year for sexual abuse and defamation. While the appeal could delay Carroll from collecting her money for years as it winds its way through the court process, it doesn't stop Trump from having to come up with that cash — and then some. Under federal court rules, civil defendants have to post security for awards while they appeal, and in New York, that includes a 9% annual interest rate. For the $5 million award, Trump had to deposit $5.5 million into a court fund — 111% of the judgment amount. Given the size of the new award, Trump could seek to use a bond instead of posting the full amount — but that could still be very costly because surety companies can charge up to 5% of the judgment amount. For Trump, that nonrefundable fee would be about $4 million, and he'd still have to put up a large amount in cash and collateral to secure the bond. "Nobody is going to write Donald Trump a bond for $83 million unless the full amount is collateralized," said Ron Kuby, a veteran New York lawyer. "It would be insanity.”
When New York Attorney General Letitia James first sued Trump, his company and its top executives in 2022, she was seeking $250 million in damages for "repeated fraud" centered on Trump's financial statements. Last month, she upped the amount to $370 million. Trump and the company have denied any wrongdoing and maintain the case is politically motivated. Judge Arthur Engoron is expected to issue his decision on how much Trump should pay in the next week or so, but he has already found that Trump and his executives have committed repeated and persistent fraud, which doesn’t bode well for team Trump.
Trump has already said he would appeal if Engoron rules against him, but if he does, he would most likely still be on the hook for the full amount. David Slarskey, a business litigation lawyer, said that New York state court, like federal court, requires security or a bond and that given the likely size of the award, Trump will probably move to get a bond. If James gets the full $370 million she's seeking, it could cost Trump up to an $18 million nonrefundable fee to the surety company. And with the 9% interest rate, the amount of money that would have to be put up would be in the $400 million range. Mattei, who represented families of the victims of the mass shooting at Sandy Hook Elementary School in Connecticut in their successful defamation suit against far-right conspiracy theorist Alex Jones, said that if Trump and his company are hit with a judgment that exceeds his ability to pay, the company "could file bankruptcy protection." Another possibility would be to liquidate assets to raise cash, a move the AG's office would monitor to make sure he's not squirreling away assets "for his own use rather than the creditors," Mattei said.
Adam Leitman Bailey, a New York real estate attorney who has sued Trump before, said he would most likely have to put up 10% of the judgment in cash while using property as collateral for the remaining amount. "He's running for president of the United States. He's not going anywhere." Kuby said any bond company would want full collateral for that appeal, as well. "It would be almost four times as crazy as doing it for $83 million without collateral," he said. If he loses the appeals, Carroll and the AG would be entitled to their full judgments, plus whatever interest accrued before the appeal was decided. If Trump wins, he would be able to get back whatever money he put up, plus the interest, but he would lose however much he had to pay the bond company.
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A judge gave Trump 30 days to pay the $454 million civil fraud judgment. He'll owe an additional $112,000 in interest each day he doesn't.
- Judge Arthur Engoron finalized his judgment in Donald Trump's civil fraud trial on Friday.
- Trump now must pay $454 million in fines or secure a bond within 30 days.
- Trump's legal team has said they will appeal the verdict.
Judge Arthur Engoron, overseeing the former president's civil fraud trial, finalized his judgment in the case Friday evening, per court records — meaning Trump now has 30 days to fork over the $454 million in fines or secure a bond for the total amount, the Associated Press reported.
The amount includes a $354 million penalty plus nearly $100 million in pre-judgment interest. A spokesperson for Attorney General Letitia James confirmed to the AP that Trump will begin accruing interest of $111,984 per day. Per the AP, this interest amount considers both the penalty and the pre-judgment interest — not just the penalty — meaning Trump will owe more interest than the $87,502 per day previously thought. On Thursday, Engoron rejected Trump's lawyers' attempts to delay the start of the penalty. The finalized ruling also means that Trump has 30 days to appeal the verdict, per New York law.
On February 16, the legal battle between James and Trump in Engoron's Manhattan courtroom came to an end after the New York City judge spelled out the penalties that Trump, two of his sons, and his former Trump Organization CFO Allen Weisselberg would pay for years of "inflating asset values to make more money." "The documents prove this over and over again. This is a venial sin, not a mortal sin," Engoron, who previously doled out a pre-trial ruling in September that found Trump committed fraud for years, said in his February verdict. Engoron continued: "Defendants did not commit murder or arson. They did not rob a bank at gunpoint. Donald Trump is not Bernard Madoff. Yet, defendants are incapable of admitting the error of their ways."
Trump and his lawyers, who spent months defending the value of the former president's businesses, called the verdict a "gross miscarriage of justice." Trump lawyer Christopher Kise said he is preparing to appeal, per a statement to Newsweek. "The case raises serious legal and constitutional questions regarding 'fraud' claims/findings without any actual fraud," Kise told the publication.
Representatives for James and Trump did not immediately respond to a request for comment from Business Insider.
