Trump’s finances take massive hit from ‘double whammy’ of legal blows

Donald Trump’s fortune, which he rode to fame and is closely tied to his public identity, could take a massive hit from back-to-back verdicts in two New York civil cases that have resulted in astronomical financial penalties for the former president.

A New York judge on Friday ordered Trump to pay nearly $355 million – plus interest – for falsely altering his net worth on key financial statements to receive tax and insurance benefits.

The decisionfell slightly short of the penalties requested by New York Attorney General Letitia James (D), who sued Trump in 2022 over deceitful business practices. However, with interest, the office said the figure will reach just over $450 million.

This is on top of the $83.3 million another New York City jury said Trump must pay writer E. Jean Carroll for defaming her in 2019, when he denied the longtime advice columnist’s accusation that he sexually assaulted her decades earlier.

Together, the two penalties amount to a whopping $438.1 million – and interest on the fraud case fine could bring that number above $500 million.

“This is a huge amount of money – I don’t care how wealthy you are,” said Will Thomas, a business law professor at the University of Michigan.

Personal wealth takes major hit

Trump’s net worth is famously obscure. However, Forbes estimates the former president’s wealth at $2.6 billion, and the Bloomberg Billionaires Index deemed him worth $3.1 billion.

Forbes and Bloomberg both estimated Trump could have around $600 million in liquid assets or cash and personal assets. Those personal assets include his personal homes, private jet and pensions, according to Forbes.

In a deposition last year, Trump told lawyers with the New York attorney general’s office he has “substantially in excess of $400 million in cash.”

“We have a lot of cash,” Trump said, purporting that figure is “going up very substantially every month.”

With the combined penalties owed surpassing $500 million, Trump stands to lose 16 percent to 19 percent or more of his estimated net worth – if he is worth the $2.6 to $3.1 billion estimators say.

Properties at risk

To pay the hefty dual judgements, Trump might have to sell off some of his prized assets if he’s unable to find the cash, Thomas said.

“It’s going to be fairly disruptive, both because he’ll lose a lot of money and also, he’s going to be put in a position where he might have to sell some of his properties – and might even have to sell them quickly or under unfavorable conditions,” Thomas said. “It’s kind of a double whammy.”

Before the trial began, Engoron ruled that Trump and his business committed “repeated and persistent fraud” on the former president’s financial statements by overvaluing the properties that helped Trump’s business build its brand.

The judge ordered the cancellation of his business certificates for any entities that benefited from that fraud, a decision Trump’s counsel called “indefensible under the law or any reasonable view of the facts” at the time. The cancellations were paused by a state appeals court.

Numerous properties owned or in part controlled by Trump and his business were thought to be subject to the decision, including famed buildings like Trump Tower and 40 Wall Street. Trump’s New York properties alone account for more than a quarter of his overall estimated wealth, amounting to a $700 million-plus loss if his control of them ceased.

But Engoron backed off that decision Friday, writing that – despite being allowed by law to cancel the licenses – doing so “could implicate serious economic concerns.” Still, he said the previous order could be renewed if an independent monitor determines the company is not abiding by his ruling.

Thomas said Engoron’s decision to keep in place an independent monitor to oversee Trump’s business operations potentially just kicks the risk to Trump’s properties down the road.

“If the monitor comes back and says, ‘These folks are out of control; I can’t get them to behave’…the court is fully entitled to say, ‘I granted a stay on that dissolution; I’m changing my mind,’” he said.

Plus, Engoron’s ruling barred Trump from holding top leadership positions at any New York company for three years and his adult sons, Donald Trump Jr. and Eric Trump, for two years.

“Even though the opinion doesn’t legally force him to fail or unwind some of these assets, I think it’s fair to say this is going to be immensely challenging for the Trump Organization to navigate the next couple of years,” Thomas said. “And while I wouldn’t say it’s the most likely outcome, it wouldn’t at all surprise me if the enterprise just does not survive this transition.”

If the cancellation of Trump’s business licenses is reinstated, it’s unclear whether his properties outside New York will be affected by the ruling – namely, his lionized Mar-a-Lago estate. Engoron noted in the earlier ruling that a county assessor had appraised Mar-a-Lago’s market value at between $18 million and $27.6 million, while Trump simultaneously valued the property between $426 million and $612 million.

New York real estate lawyer Adam Leitman Bailey said that despite Engoron’s extensive treatment of Mar-a-Lago in his decision, a ruling that tried to sanction it would fail.

“The judge has no jurisdiction to touch, or to cover, or to decide anything outside of New York state,’ Leitman Bailey said.

States could, however, attempt to use the New York Supreme Court’s decision as grounds to pursue similar action on properties like Mar-a-Lago, he added.

Legal fees pile up

With Friday’s ruling, Trump’s legal woes will hardly subside. His four criminal cases and a spate of other civil cases could also continue to pile on legal fees.

In October, Trump told supporters in Iowa he had spent more than $100 million in legal fees already. His fundraising committees spent roughly $50 million on legal consulting in 2023, with some $30 million doled out in the second half of the year as his legal matters picked up steam, recently filed federal records show.

Chris Kise, Trump’s lead lawyer in the fraud case, earned nearly $9 million of those funds for defending the former president against James’s claims he falsely altered his net worth on key financial statements to receive tax and insurance benefits. Kise also represents Trump in the federal criminal case over his alleged mishandling of classified documents.

Lawyers Alina Habba and Clifford Robert – who also represented Trump, his business and top executives, including Trump’s adult sons – earned about $4 million and $5.3 million, respectively.

One potential financial lifeline for Trump could come once he is declared the presumptive nominee in the Republican Party. Trump could clinch the nomination as early as mid-March if he continues to win each GOP primary contest, needing only 1,215 delegates to earn the title.

If Trump becomes the presumptive nominee, his campaign would be able to team up with the Republican National Committee (RNC) for joint fundraising efforts, giving the former president’s political operation a greater war chest during what is shaping up to be a lengthy general election cycle.

What’s next?

Trump has vowed to appeal both the fraud verdict and Carroll verdict, which could lessen the amount he eventually must dole out in damages.

“Left unchecked, this decision will cause irreparable damage to both the business community and the rule of law in our country,” said Kise.

But unless an appeals court issues a stay on those judgements, the former president will have to cough up the cash.

David Slarskey, a New York-based business litigation attorney, said posting collateral or an appeal bond would enact an automatic stay, but in doing so, that money would become “immediately collectible” if Trump loses on appeal.

“I would expect (Trump’s legal team) maybe to not want to do that, because it makes it self-executing – makes it automatic,” he said. “That payment’s made once the judgment has been confirmed.”

The former president might also have trouble finding lenders to front the cost, given the nature of the judgement against him, Thomas said.

“There’s a certain irony to that; I mean, this is a case where he’s just been found having committed fraud against major lenders – and now he’s going to be going to them and asking for a $500 million loan?” he said.

Trump could temporarily avoid paying the penalties by filing for personal bankruptcy. Rudy Giuliani, a staunch Trump ally, filed for bankruptcy days after a Washington, D.C. federal jury ordered him to pay a staggering $148 million to two ex-Georgia election workers he baselessly accused of committing fraud in the 2020 election.

However, to file for personal bankruptcy, Trump would have to prove the damage amounts surpass his total net worth.

Last month, Trump repeated his claim he’s “worth much more than the numbers shown on my financial statements” that James sued him over and claims were vastly inflated.

“By definition, if he can’t pay a $400 million judgment and is subject to bankruptcy, that means he’s not worth $400 million,” Thomas said. “It’s one thing when the court says you’re not as rich as you say you are, but bankruptcy would require Donald Trump to say, ‘I don’t have that money.’”

Clayton Vickers and Brett Samuels contributed.

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