A potential Donald Trump payment of $454 million in his New York fraud trial will bring him close to bankruptcy, a financial analyst has said.
Jon Gabrielsen, an Atlanta-based market economist, told Newsweek that, even if Trump has $500 million in liquid assets as he recently claimed, it won’t be enough to keep his businesses solvent.
Trump has until Monday to pay the $454 million he was ordered to pay after a New York judge ruled that he had committed fraud to obtain favorable bank loans.
On Friday, Trump said that he has $500 million in bank accounts. Gabrielsen, however, said this might not be enough to keep Trump’s businesses afloat.
“If Trump really has $500 million in cash in his accounts, then all the courts need to do is seize $454 million of that cash leaving him with only about $46 million in cash float,” Gabrielson said.
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He added that this is “surely not enough to cover the day-to-day variability in cash needed for the size of his business.”
Gabrielson said that Trump, in this situation, would have to sell some properties to keep his businesses to avoid bankruptcy.
“The court need not be concerned that leaves him with too little cash to be a going concern, that is Trump’s problem. So the point is it really hurts him even though the court did not seize any of his properties,” he said.
Newsweek sought email comment from Trump’s attorney on Monday.
On Thursday, Trump’s lawyers stated in a court filing that they are having difficulty obtaining a bond because underwriters are looking for collateral of shares or other liquid assets rather than property. More than 30 bond companies have rejected Trump, they wrote.
New York Attorney General Letitia James sued Trump, his two adult sons, Donald Jr. and Eric, the Trump Organization and two firm executives, Allen Weisselberg and Jeff McConney, in September 2022. New York Judge Arthur Engoron, who oversaw the trial, found that Trump inflated his assets to get more favorable business loans. Late last year, continuing into early January, a trial was held to determine how much the former president and his associates would pay in damages.
On February 16, Engoron ruled that Trump will have to pay roughly $454 million in penalties, including interest. To appeal the fraud ruling, Trump has to first pay the full amount of the penalty. His lawyers, however, said he would have to put up 120% of the judgment, or more than $557 million to obtain the bond in a filing last Thursday.
As part of the ruling, Trump, Weisselberg and McConney will also be barred from serving as an officer or director of any New York corporation or other legal entity in the state for three years. Donald Trump Jr. and Eric Trump were ordered to each pay more than $4 million and were banned from doing business in the state for two years.
Trump, the current GOP frontrunner in the 2024 presidential election, has maintained his innocence in the case and has said it and other legal matters he is facing are politically motivated.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.