NEW YORK (Reuters) – The insurer that provided Donald Trump a $175 million bond in his New York civil fraud case will try to convince a state judge on Monday that he is qualified and financially strong enough to issue the bond.
The bond issued by Knight Specialty Insurance Co is intended to ensure that Trump complies with a $454.2 million judgment won by state Attorney General Letitia James if he does not win his appeal.
Judge Arthur Engoron imposed the sanction after finding that Trump, the Republican presidential candidate, had fraudulently inflated his net worth and real estate assets to induce banks and insurers to offer better terms.
James, a Democrat, challenged the bond this month, saying Knight did not have a “certificate of qualification.” The state attorney general filed court papers Friday questioning whether the bond was backed by secured assets.
Knight is owned by billionaire Don Hankey, a Trump supporter.
Engoron will consider James’ objection at a civil court hearing in Manhattan, the same time jurors on the street are expected to hear opening arguments in Trump’s criminal trial.
Knight said it was authorized to issue the bond, which is fully collateralized by cash held in a Charles Schwab account secured at the insurer, and could access nearly $2.2 billion in assets with its parent company in the event of a problem.
James said in court papers that a trust owned by Trump still controls the account and that Knight’s own financial arrangements appear insufficient to cover the bail amount.
Hankey previously said in an interview that he charged Trump a low fee because he didn’t anticipate problems.
“We thought it would be a simple procedure that would not lead to further legal problems and it is not happening that way,” he said. “We probably didn’t charge enough.”
Hankey made his fortune in subprime auto loans, with some regulators criticizing his companies’ debt collection tactics. He is worth $7.4 billion, according to Forbes magazine.
Trump was initially expected to secure bond for the entire verdict while he appealed, but a state appeals court allowed him to post a lower bond.
(Reporting by Jody Godoy in New York; editing by Nick Zieminski and Bill Berkrot)
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