Why the Trump bond crisis looks like a concerted effort to ruin him

I wonder if this was the plan all along: trying to bankrupt Donald Trump?

The way things are going, it certainly looks that way.

The case brought by New York’s Democratic attorney general, Letitia James – who ran on a platform of investigating Trump – has spun out of control. Even if he did all the things she charged in her civil fraud suit, the businessman-turned-president has been put in an unbelievable, and really unacceptable position.

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Much of the media is treating this story with undisguised glee, with almost no one raising the question of whether this is blatant overkill. As for the Democrats, even if it turns out they can’t beat him at the courthouse or the ballot box, maybe they can send him to the poorhouse. (Not really – he has vast real estate holdings – but the latest push could seriously damage the Trump Organization.)

Trump’s lawyers have revealed that he’s unable to post a $454 million bond, despite approaching about 30 companies that provide appeal bonds, and has run into "insurmountable difficulties."

Former US President Donald Trump, center, greets attendees during a Super Tuesday election night watch party at the Mar-a-Lago Club in Palm Beach, Florida, US, on Tuesday, March 5, 2024. (Eva Marie Uzcategui/Bloomberg via Getty Images)

The former president posted on Truth Social: "Nobody has ever heard of anything like this before. I would be forced to mortgage or sell Great Assets, perhaps at Fire Sale prices, and if and when I win the Appeal, they would be gone. Does that make sense? WITCH HUNT. ELECTION INTERFERENCE!"

James did a victory lap on ABC, vowing to enforce the penalty and saying that if necessary "we will ask the judge to seize his assets."

Or they could give Trump time to appeal.

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Trump was convicted of inflating the value of real estate assets to get a better deal on loans. Judge Arthur Engoron gave him no benefit of the doubt, and of course Trump constantly attacked him and Tish James.

As I noted at the time, many real estate firms engage in overly generous valuations. The value of any given property in any given market is ultimately subjective. That’s why these company assessments, including Trump’s, contain a "due diligence" clause that essentially tells lenders to make their own determinations rather than just relying on the borrower.

Republican presidential candidate and former President Donald Trump arrives for an election-night watch party at Mar-a-Lago on March 5, 2024 in West Palm Beach, Florida. (Win McNamee/Getty Images)

But there are lines that aren’t supposed to be crossed. It didn’t look good that his Trump Tower triplex was assessed at three times its actual size. 

But overall, there were no identifiable victims. The banks made money and were happy. Trump’s company was happy. Nobody said they got screwed.

But again, assume for the sake of argument that the Trump Organization was guilty as charged. What would be a reasonable penalty?

Former US President and Republican presidential candidate Donald Trump speaks during a Buckeye Values PAC Rally in Vandalia, Ohio, on March 16, 2024.  (KAMIL KRZACZYNSKI/AFP via Getty Images)

The AG originally asked for $250 million. Then she later upped that to $370 million. Engoron imposed a fine of $355 million, giving James almost everything she wanted, and barred Trump from serving as an officer or director of any New York corporation for three years.

Does this seem like a commensurate punishment, given that nobody lost a dime? Or does it appear that the judge and the attorney general are determined to wipe out his company?

Isn’t it troubling that the companies approached by Trump said they had never had to deal with such a gargantuan bond request?  

Keep in mind that this isn’t even a criminal case.

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Trump’s dilemma is that he isn’t liquid enough to post a bond of that size, especially after putting up a $91 million bond in the second defamation lawsuit brought by writer E. Jean Carroll. (The former president has just sued ABC and George Stephanopoulos, who said Trump was held liable for rape when the judicial finding was sexual abuse, although the judge in that case said many people understood that to be rape.)

Trump could avoid any seizure of assets by selling off a prime hotel or building, but the buyer, knowing of the pressure he faces, would have all the leverage to insist on a lowball price.

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There is something odious about the case and the unprecedented nature of the punishment. I don’t know how Trump will fare on appeal, but it has certainly convinced his supporters that his Democratic opponents are out to get him.