The insurer that furnished Donald Trump with a $175 million bond for his New York civil fraud case faces the task of persuading a state judge on Monday of its credentials and financial stability to issue such a guarantee.
Knight Specialty Insurance Co provided the bond, intended to ensure Trump’s compliance with a $454.2 million judgment secured by state Attorney General Letitia James in case Trump’s appeal is unsuccessful.
Justice Arthur Engoron levied the penalty after determining that Trump, the Republican presidential candidate, artificially inflated his net worth and real estate assets to dupe banks and insurers into offering more favorable terms.
James, a Democrat, contested the bond earlier this month, arguing that Knight lacked a “certificate of qualification.” She filed court documents on Friday questioning whether the bond is backed by secure assets.
Knight is under the ownership of billionaire Trump supporter Don Hankey.
Engoron will address James’ objection at a civil court hearing in Manhattan, coinciding with the expected commencement of opening arguments in Trump’s criminal hush money trial nearby.
Knight has asserted its authorization to issue the bond, which is fully supported by cash held in a Charles Schwab account pledged to the insurer. Moreover, the company claims access to nearly $2.2 billion of assets at its parent company in the event of any mishap.
However, James countered in court filings that a trust owned by Trump still controls the account, and Knight’s financial arrangements appear insufficient to cover the bond amount.
Hankey previously acknowledged in an interview that he charged Trump a minimal fee as he didn’t anticipate complications. “We thought it would be an easy procedure that wouldn’t involve other legal problems, and it’s not turning out that way,” he remarked. “We probably didn’t charge enough.”
Hankey amassed his wealth in subprime car loans, with some regulators criticizing his companies’ debt collection practices. His net worth stands at $7.4 billion, according to Forbes magazine.
Originally, Trump was mandated to procure a guarantee for the entire verdict during his appeal, but a state appeals court permitted him to furnish a smaller bond.
