Status Report: The Trump Judgments

I answer common questions about whether, when, and how Trump will satisfy the multiple judgments against him.

Image courtesy of The Daily Beast

Today I’m launching a new feature called the “Status Report.” Sometimes, there are big events in the news that, once we get past the initial “wow” or SMDH moment, demand a bit more attention. And as questions naturally arise, it makes sense to return to the story with a Status Report.

Today we return to the Trump judgments.

If you’re keeping track, in the past months, Trump has lost a 7-figure case ($5 million to E. Jean Carroll for rape (and yes, it was rape, as the term is commonly understood and as the judge even found as a factual matter)); an 8-figure case ($83.3 million to E. Jean Carroll for defamation); and now a 9-figure case (a $350+ million verdict, plus pre-judgment interest and penalties, to the State of New York for civil fraud).

A common reaction is some version of this: “Trump will never pay any of these. He’ll hide it. He’ll appeal forever. He’ll declare bankruptcy again.” Today I want to walk through why this skepticism, while understandable, is misplaced, and why in my view Trump will be out a lot of money relatively soon.

How much does Trump now owe in judgments?

If you add up the judgments, including the statutory 9% pre-judgment interest on the most recent verdict, Trump and the other defendants owe in excess of half a billion, as follows:

$88.5 million to E. Jean Carroll in two federal court jury verdicts;

$354 million to the State of New York from Judge Engoron’s ruling; and

$86.2 million in prejudgment interest to date, according to AG Letitia James.

Here’s a fun fact: Pre-judgment interest starts accruing upon “ill-gotten gains” the moment the defendant receives them. In his 92- page opinion, Judge Engoron identified two major ones that fall in this category: the nine figures more that Deutsche Bank could have made, had it been truthfully informed about Trump’s actual wealth, leading to a higher interest rate; $126 million that Trump wrongly earned off of a deal to transform the Old Post Office in D.C. into a luxury hotel; and the $60 million he received from the sale of a golf course in the Bronx.

That all adds up to $528.7 million owed in judgments so far.

“But he doesn’t have the money!”

When we see a big money judgment, such as against conspiracy peddler Alex Jones or serial defamer Rudy Giuliani, we hear often of how the plaintiffs still haven’t seen a penny from it, and how they likely will have a hard time collecting. Often in these cases, the defendant isn’t financially solvent and doesn’t have significant assets remaining to pay the judgment. It doesn’t mean the verdict and obligation to pay won’t haunt them the rest of their natural lives. It just means that it will be arduous collecting from them, and lawyers and collection agencies will be busy with liens, garnishments and the like.

The case is very different when you have a defendant like Donald Trump. To the probable surprise of many, Trump actually has a great deal of cash on hand. After all, ever since leaving the White House, he has made pals and struck deals with the Saudis and sought to extend the Trump brand in many ways.

He’s even actually, and somewhat foolishly, been boasting about his cash while under oath. For example, as Politico reported, Trump claimed in a deposition last year that he had “substantially in excess” of $400 million in cash available to him. “We have, I believe, 400 plus and going up very substantially every month,” he said, adding: “My biggest expense is probably legal fees, unfortunately.”

This squares with an investigation by the New York Times into Trump’s current liquidity. It found, “As of last year, Mr. Trump was sitting on more than $350 million in cash and cash equivalents.”

The judgments are likely to empty Trump’s coffers of cash fairly quickly. Assuming the amount of the judgments still exceed the amount of cash he has on hand, he will have to scramble to make up the difference somehow, particularly if he intends to appeal, as we assume he will.

The appeal escrows

Contrary to popular notion, a defendant who has lost a big money verdict doesn’t get to delay the financial consequences of that by appealing forever. Trump has to actually put up money to cover the judgment. That amount has to be in excess of the judgment, usually meaning that 110 to 125 percent of the judgment is required. This extra amount is needed in order to cover post-judgment interest that will accrue on the amount while the appeal is pending.

On all three judgments against him, Trump has to put money into an escrow account while his appeal is pending. Trump already did this with the $5 million judgment against him in his first federal trial against E. Jean Carroll. He put up some $5.5 million.

Using that same math, with the judgment now entered against him on the second E. Jean Carroll trial for $83.3 million, he will have to put up over $91 million. If he goes with a bond, he will need to put up 20 percent of that amount plus collateral and tack on some kind of a premium—but he’d first need to find a surety willing to make that guarantee.

“He’ll just go to his campaign for the funds!”

This is another common shrug, but it’s also very likely mistaken. It’s true that the Trump Campaign has been paying Trump’s legal bills so far on his four indictments, to the tune of $50 million. But there is a nexus, however tenuous, between his campaign and those lawyer fees, and donors have understood that their dollars are going in part toward his legal defense.

That is a far cry from using campaign funds—especially his PAC funds, which are supposed to be separate from the campaign—to cover actual civil liabilities for sexual assault, defamation and fraud. As Richard Pildes, a professor of constitutional law at NYU Law School, noted in response to an inquiry from Politico, “Campaign funds cannot be used for that purpose regardless of whether the PAC is the decision-maker.”

The fact that this would be illegal, however, shouldn’t lead us to assume Trump won’t try it. But what a self-own it would be if the hundreds of millions in MAGA money raised in 2024 went not to staff, TV ads and the ground game of the campaign, but to satisfy huge money judgments owed by Trump himself.

“He’ll just hide the money, declare bankruptcy, or simply ignore the judgments!”

But what if Trump decides he’s above the law and isn’t going to pay any of it, not even put up a bond for the appeal? What if he declares bankruptcy, then dares E. Jean Carroll’s lawyers and the state government to come try and collect it?

This could make for some interesting television, but it’s not likely to happen.

For starters, there is already a court-appointed monitor over the Trump Organization, who is acting more or less like a corporate babysitter. Big sums of money can’t move without her knowing about and stopping it.

Further, given Trump’s current cash holdings and his numerous properties around the world, a bankruptcy doesn’t seem likely or to be helpful. While he could try to file one, it would get challenged pretty quickly. And in any case, bankruptcy doesn’t discharge verdicts for sexual assault and defamation, and there’s a question about whether the fraud charge would be dischargeable.

Finally, if Trump doesn’t satisfy the NY state judgment, then AG Letitia James can order the sheriff to seize assets, including whole buildings if necessary. And if he doesn’t post an amount to cover the big judgment against him for defamation, Carroll’s attorneys can begin a post-judgment process of discovery on his bank accounts and put liens on his assets and garnishment on any wages. And they’d be highly motivated to do so. Here, the court-appointed monitor again could be of great assistance in identifying where to satisfy the judgments most quickly.

What does worry me

If Trump has to seek a surety willing to put up the bond in exchange for collateral and a promise to repay, or someone to outright lend him the money he owes, one obvious question is who that might be. Judge Engoron foreclosed him going to any banks chartered in New York by making those off-limits for the next few years, and any traditional bank would probably balk at the idea of covering Trump’s judgments for him.

But there aren’t any limits or laws against Trump seeking help from sources outside New York, or even foreign sources such as the Russians or the Saudis. They have been known to bail him out with eight or nine figure deals in the past. And after all, his son-in-law, Jared Kushner, just closed a fund with the Saudi government as backer to the tune of two billion dollars, even though he has zero relevant experience in this kind of asset investment and management.

Any way you slice it, the judgments leave Trump vulnerable financially, which in turn means he is a prime target for foreign influence. In fact, this is likely how the Russians got their fingers into everything in Trumpland in the first place, back when he needed bailing out before. And even if there is no direct assistance from foreign governments to help him make good on these judgments, Trump will spend the next few years trying to dig out from the financial hole they left. And that means foreign bad actors will come circling.

This can and should become a serious campaign issue, especially given how both the Saudis and Putin are confirmed murderous authoritarians that throw their petrol dollars around to buy influence. Trump’s existing ties to both will need to come under even greater scrutiny than ever now that he is teetering financially.

That said, I would much rather Trump be financially strapped and preoccupied with how his business empire is on life support than flush with hundreds of millions in cash to help wage his dangerous campaign for reelection. These verdicts are not mere weights upon his ledger, to be discounted as just more passing headlines. They are wrecking balls that are now swinging, and they are about to strike at the heart of Trump’s power and identity.