Trump Cash Stockpile at Risk From $450 Million Dual Verdicts

Erik Larson
·7 min read
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(Bloomberg) -- Donald Trump is facing a pair of major legal verdicts in New York that risk wiping out most — if not all — of the cash the billionaire says he has on hand, a potential blow to the presidential candidate whose persona is tied up with financial success and wealth.

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Trump on Friday was ordered by a jury to pay $83.3 million to writer E. Jean Carroll for defaming her in 2019 when he denied her sexual-assault allegation. On top of that, a verdict is expected this week in New York’s civil fraud trial, which seeks the return of $370 million in “illegal profits” Trump allegedly made by lying to banks about his wealth to get better terms on loans.

In a deposition last year, Trump described his stockpile of cash as being “substantially in excess” of $400 million. The Bloomberg Billionaires Index placed his liquid assets at about $600 million, though Trump’s exact financial status remains famously opaque.

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The prospect of being hit with damage awards totaling more than $450 million in less than a week points to the potential for a cash problem. The two lawsuits sought to punish Trump financially. If the judge in the New York fraud case accepts the attorney general’s $370 million request, both will have succeeded in hitting at the billionaire’s wealth.

The timing couldn’t be worse as the likely Republican nominee for the November presidential election already faces mounting legal bills after being charged with 91 criminal offenses in four criminal prosecutions. Trump’s cash and his overall wealth are separate from his campaign finances, which by all accounts are still strong, but that money can’t be used to finance these verdicts.

Personal Expenses

While Trump can use campaign funds to pay some of his legal bills — those that relate to his political duties or due to an investigation by Congress, for example — he can’t use them for personal expenses like damages, said former federal prosecutor Jennifer Rodgers.

“There aren’t any exceptions that would cover a damages award for a matter not involving him as a candidate or officeholder,” she said.

Alina Habba, Trump’s attorney in both of the cases, said the financial penalties were “clearly all by design and the epitome of selective prosecution against the clear Republican nominee.”

Trump has made his legal troubles the center of his fundraising pitch to supporters and has raised millions of dollars, some of which he has used to pay for his legal bills. Trump’s campaign reported spending about $25.5 million in lawyer fees for the first six months of 2023, and will report the latest figures on Wednesday.

But Trump would be barred from paying for damages with funds raised by his super political action committee, Make America Great Again Inc., which earlier this month announced a $46 million haul for the final six months of 2023. Daniel Weiner, a director for elections and government at the Brennan Center for Justice, said the rules may not stop Trump due to “gray areas” and a lack of enforcement.

“Super PACs are not supposed to donate to candidates, they’re supposed to be independent,” he said. “It would violate the spirit of the law to use Super PAC money, raised to support the candidate, to pay his debts.”

Real Estate Empire

Trump has a net worth of $3.1 billion according to the Bloomberg Billionaires Index, the most cash and least leverage than at any point in the past decade. Most of his fortune is tied up in real estate, including office and residential buildings in Manhattan, several golf courses and the famous Mar-a-Lago Club in Palm Beach, Florida.

A $450 million worst-case penalty from the civil fraud trial and Carroll verdicts would eat up nearly 15% of his estimated net worth. In a deposition as part of the lawsuit by New York Attorney General Letitia James, the former president gave extended testimony about his wealth, including his cash.

“We have a lot of cash,” Trump said in April 2023. “I believe we have substantially in excess of $400 million in cash, which is a lot for a developer,” he added. “Developers usually don’t have cash. They have assets, not cash. We have, I believe, 400 plus and going up very substantially every month. My biggest expense is probably legal fees, unfortunately.”

To be sure, the billionaire has hundreds of millions of dollars in assets he could tap to replenish his cash stockpile. Trump is seeing a boom in revenue in his Florida properties, and has paid down his loans by selling his Washington hotel. A federal disclosure last year showed that from 2022 through April 2023, Trump’s Miami-based company that owns golf courses and a resort produced $145.8 million, Mar-a-Lago generated $52.3 million and Trump Ruffin Tower in Las Vegas took in $32 million.

Appeals Escrow

Trump, who denies wrongdoing in all the cases, said he’ll appeal the Carroll verdict, and will most likely do the same if the judge issues a steep monetary award in the James case. Even so, Trump may still have to part with the cash and put it up as escrow with the court until the appeals process is resolved.

If Trump decides to put the money in escrow in lieu of a bond, it could amount to as much as 110% of the judgment. That means the former president may have to part with even more cash, at least temporarily, but would get the money back if he wins the appeal.

When Carroll, who claims Trump raped her in the 1990s, won a seperate sexual-assault trial against Trump last year, a jury awarded her $5 million in damages. The former president was forced to put $5.5 million in escrow with the court while he appeals.

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Carroll’s lawyer, Roberta Kaplan, had Trump’s overall wealth in mind — not just his cash — when she urged the jury in her closing argument on Friday to consider a large award of punitive damages to punish Trump for defaming the former Elle magazine columnist and try to stop his “malicious and spiteful” conduct.

‘Hottest Brand in the World’

“A billionaire like Donald Trump could pay a million dollars a day for ten years and still have money left in the bank,” Kaplan said in her presentation. “With that sort of extreme wealth, it will take an unusually high punitive damages award to have any hope of stopping Donald Trump, to have any chance of allowing Ms. Carroll’s life to return to normal.”

The jury of seven men and two women awarded Carroll $65 million in punitive damages on top of $18.3 million for damage to her reputation, suggesting they agreed with Kaplan that Trump needed to feel the pain in his wallet to get his attention.

James, who filed the civil fraud suit on behalf of the state, made Trump’s wealth central to her case. She presented evidence at a monthslong trial that Trump inflated the value of his assets by as much as $3.6 billion a year to get lower interest rates on hundreds of millions of dollars in loans for key development projects. James, a Democrat, has claimed that Trump’s wealth has “long been rooted in incredible fraud.”

The real-estate mogul, of course, suggests he’s actually worth much more — valuing his own brand at as much as $10 billion.

“I became president because of the brand,” Trump said in the taped deposition. “I think it’s the hottest brand in the world.”

--With assistance from Kristine Owram, Brian Chappatta, Tom Maloney and Laura Davison.

(Updates with details in second paragraph below ‘Appeals Escrow’ subhead)

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