Bankruptcy is unlikely to save Donald Trump from having to pay the millions of dollars he owes from recent lawsuits, a legal expert has said.
Eric C. Chaffee, a business law professor at Case Western Reserve University in Cleveland, Ohio, told Newsweek that Trump would still have to sell property to pay for the $450 million he owes in fraud and defamation judgments.
“With the recent judgments against former President Trump, the future of his real estate empire is in doubt,” Chaffee said.
Even if Trump declares bankruptcy to avoid paying, “he may not be able to discharge the liability against him in that process” because a court will not allow him to write off the full amount of the judgments.
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“Even if a bankruptcy court is willing to allow him to discharge some of that liability, he likely will have to sell some of his property in the process to satisfy the judgments against him,” he said.
Chaffee said that Trump may resist bankruptcy.
“Although his organizations have declared bankruptcy in the past, he has vowed not to declare personal bankruptcy,” he noted.
However, he said Trump “is not without hope.”
“Large judgments are often reduced upon appeal. In addition, he may have sufficient financial assets to pay the judgments against him without liquidating his property holdings,” he added.
Gregory Germain, a law professor at Syracuse University in New York, said that Trump will likely seek a bond to pay for the lawsuits before launching an appeal. If Trump doesn’t have the resources to do so, he may be in trouble, Germain said.
“If he is not able to meet the requirements for obtaining a stay pending appeal, then his financial situation would be in serious jeopardy,” he said. “So I would expect him to [then] consider a bankruptcy filing to stay enforcement while he pursues his appeal.
“We are just going to have to wait and see what the appellate courts require and whether Trump will be able to meet the requirements. If he is able to obtain a stay pending appeal, then the ultimate outcome will await the results of the appeal, which will be months away.”
Newsweek contacted Trump’s attorney by email on Tuesday to comment on this story.
On February 26, New York judge, Arthur Engoron, ruled that Trump will have to pay roughly $354.4 million in penalties for over-inflating the value of his assets. His sons, Donald Trump Jr. and Eric Trump, were ordered to each pay more than $4 million.
Trump, the current GOP front-runner in the 2024 presidential election, has maintained his innocence in the case and claimed it was politically motivated.
On January 26, a New York City jury ordered that the former president must pay $83.3 million in damages to E. Jean Carroll, a retired journalist, for statements Trump made in 2019. He said she was lying about allegations that he sexually assaulted her inside a Manhattan department store dressing room in the 1990s. That amount includes $7.3 million in compensatory damages, $11 million for reputational repair, and $65 million in punitive damages.
In May 2023, Trump was ordered to pay Carroll $5 million in damages in another civil defamation trial stemming from a denial he made about her claims in 2022. He has repeatedly denied all wrongdoing and has said he will appeal the verdict.
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.