Donald Trump and his co-defendants held discussions with the insurance giant Chubb The company sought $464 million in bail in the former president’s civil fraud case, according to a Trump lawyer, but the company backed down – days after it caused a stir for being Trump, according to a Trump lawyer had granted bail in another case.
Chubb was one of more than 30 companies that refused to enter into a bond that would put the massive economic fraud verdict on hold, Trump lawyers said in a filing with the New York Court of Appeals on Monday.
Lawyers in the filing asked the appeals court to “put the brakes on” the ruling before New York Attorney General Letitia James can begin collections – a trial that could begin as early as next week. James has said she will seize Trump’s assets if he cannot pay the judgment.
A panel of judges in that court has yet to rule on Trump’s request to stay the sentence without requiring him to post fully secured bail.
Alan Garten, a lawyer for the Trump Organization, said in that filing that Chubb was the only company willing to consider providing an appeal bond secured by a mix of cash and real estate.
The other companies – including Warren Buffett Berkshire HathawayLiberty Mutual, Allianz and traveler – just wanted cash or other liquid assets.
Appeal bonds are designed to prevent the loser of a court judgment from using the appeal process to delay or avoid paying their penalties. The bonds also ensure that the plaintiff can receive their award quickly if the appeal is unsuccessful.
Chubb was “actively negotiating” with Trump and his co-defendants, Garten said. But “within the past week,” he said, Chubb changed course and “informed defendants that it could not accept real estate as security.”
“While this decision was disappointing, it was not surprising since Chubb was the only guarantor willing to even consider accepting real estate as security,” Garten said.
Garten’s statement came more than a week after it was revealed that a Chubb subsidiary had granted Trump $91.6 million bail in a separate civil case accusing him of defaming writer E. Jean Carroll was made after she accused him of rape.
Chubb came under rapid scrutiny for underwriting this bond. News outlets noted that Chubb CEO Evan Greenberg had previously been appointed by Trump to a trade policy advisory board and a business group tasked with combating the economic impact of Covid-19.
On Wednesday, Greenberg sent a letter to investors, clients and brokers who had expressed concerns about the bond.
“As surety, we do not take sides, it would be wrong for us to do so, and we do not support the defendant in any way,” Greenberg wrote. “When Chubb issues an appellate bond, it does not adjudicate the claims, even if the claims allege reprehensible conduct.”
He added that Trump’s bond in the defamation case was “fully secured.”
Records show Trump used a Schwab brokerage account as collateral for the Carroll-related bond.
CNBC asked Chubb on Wednesday whether the company was talking to Trump’s team about obtaining a bond in the business fraud case.
In response, Chubb said: “As a matter of policy, we do not confirm or deny whether we have business discussions with companies or individuals.”
A Chubb spokesman did not respond to CNBC’s request for comment on Monday’s court filings.
Lawyers argued in that lawsuit that Trump would suffer great harm if he were forced to quickly sell parts of his real estate portfolio to raise enough money for a bond.
They said it was “impossible” for them to file a full appeal despite their “diligent efforts.”
That’s largely because the few surety companies willing to underwrite such a large bond don’t accept “hard” assets like real estate as collateral, they said.
Because the person suing often loses again, surety companies view the bonds as “dangerous” and typically require them to be fully backed by liquid assets, said JD Weisbrot, president and chief underwriting officer at JW Surety Bonds.
Unlike banks, which are better able to seize liens and sell real estate, insurance companies “do not own real estate,” Weisbrot said in an interview with CNBC.
Still, Weisbrot agreed with Trump’s lawyers that the bond size was “unprecedented.”
“I have never heard of a private organization of this size requiring a deposit,” he said.
As James’ deadline to collect on the fraud judgment approaches, the Republican presidential candidate took to social media to vent his anger over the case.
The trial judge “actually wants me to pay hundreds of millions of dollars for the right to appeal his ridiculous decision,” Trump posted on his social media page Truth Social on Tuesday morning.
“I shouldn’t have to raise money until the end of the appeal process because the corrupt judge and attorney general are being forced to,” he claimed in a later post.
In fact, the New York court ruling requires Trump to post bail to prevent James from collecting the fraud judgment.
“No one has ever heard of anything like this before. “I would be forced to mortgage or sell large assets, perhaps at bargain prices, and if I win the appeal they would be gone,” Trump wrote on the website.
Source link
2024-03-20 00:39:21
www.cnbc.com
