Trump's appeal bond crisis confirms his business incompetence
19 March 2024
Former President Donald Trump can’t find an insurance company to underwrite his bond to cover the massive judgment against him in the New York attorney general’s civil fraud case, his lawyers told a New York appeals court.
Trump’s attorneys said he has approached 30 underwriters to back the bond, which is due by the end of this month.
“The amount of the judgment, with interest, exceeds $464 million, and very few bonding companies will consider a bond of anything approaching that magnitude,” Trump’s lawyers wrote. CNN
Based on my 20 years as an attorney (now retired) handling commercial litigation and collections and 40+ years as a small business owner, I believe that his problems are due solely to his business incompetence; he does not deserve our sympathy.
Few business owners in the world have been as reckless as Donald Trump.
First. the Court found that he engaged in massive fraud:
Mr. Trump exaggerated the property values, and in turn his own net worth, to obtain favorable loan terms from banks and insurers, according to Ms. James.
At the trial, which lasted months, Ms. James’s lawyers showed that Mr. Trump’s company had ignored appraisals and manipulated numbers to sometimes to absurd heights.
For example, the former president had valued his triplex apartment in Trump Tower on Fifth Avenue as if it were 30,000 square feet for years. It was actually 10,996 square feet. New York Times
Businesses often lie or commit fraud but typically it is modest so that they can claim they made a mistake or hope that it won’t get noticed. Not Donald J. Trump. He seems to believe that he is above the law and does not care about the scope of his lies, which may explain his 4,000+ legal cases through 2016.
Second, when businesses are caught in lies or fraud, they typically settle. In this case, instead of a $454 million award, I believe he could have settled early on for a mere $25 million and avoided huge legal bills if he admitted error on his part and apologized. However, he refuses to settle, perhaps because “his manhood is at issue here." Of course, he could still settle. If he offered the Attorney General a settlement of cash and real estate worth $150 million, admitted his errors, apologized and agreed to drop any appeals, she might accept the offer.
Third, there is no legal advantage, and a host of obvious disadvantages, to attacking the attorney general prosecuting the case or the judge deciding his case. Perhaps it helped his political campaign but it predictably hurt his legal case.
Fourth, Trump should have prepared for losing the case years ago. The investigation began in 2019 and the lawsuit was filed in September 2022 seeking $250 million in damages. If Trump’s strategy was to refuse to admit any wrongdoing, refuse to settle and attack the attorney general and judge, a prudent businessperson would have had sufficient funds available for an appeal bond in case he lost. As the trial proceeded, it became more and more clear that he was going to lose. His waiting until the last possible moment to try to raise funds for an appeal bond was reckless.
Trump has repeatedly been found to be a “bad businessman”:
Trump, the Bad, Bad Businessman, New York Times, 5 August 2016
The Worst Businessman in America, The New Republic, 8 May 2019
Trump is either a tax fraud or the world’s worst businessman, Washington Post, 28 September 2020
Trump Tax Returns Undermine His Image as a Successful Entrepreneur, New York Times, 30 December 2022
His recent New York civil trial confirms how bad a businessman he is.
Related essays:
Trump's pending bankruptcies, 26 February 2024
Donald J. Trump - a life of breaking all the rules, 22 February 2024
Donald Trump's gag orders, 4 October 2023
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