February 16, 2024 marks yet another milestone date in American Presidential history. A final judgment was issued in the civil fraud trial in New York State against Donald Trump. With a cumulative price tag of $364 million dollars across four defendants, $355 of it against Donald Trump individually, there is much to unpack.
For reference, the entire ruling is accessible on the following link at The New York Times:
https://static01.nyt.com/newsgraphics/documenttools/ef72526861902856/1e996397-full.pdfThe top-level judgment imposes a $355 million dollar penalty on Donald Trump, a $4,013,024 dollar penalty on Donald Trump, Jr., a $4,013,024 dollar penalty on Eric Trump, and a $1 million dollar penalty on Allen Weisselberg. (Weisselberg was paid a $2 million severance by The Trump Organization as hush money so this claws back half of that severance.)
While Trump will appeal this, delaying a final, FINAL status on this case and the final financial penalties paid, the defendants will be obligated to put up a bond for the penalty amounts within 30 days if an appeal is filed. Even if Trump files an appeal, the stated interest rate he will pay on any bond will be 9%. That's $31,950,000 dollars per year just in INTEREST.
That means this ruling DOES impose an IMMEDIATE, astronomically large demand for CASH upon Donald Trump. If Trump's financial past is current events and prologue, Trump MIGHT be rich on paper but he is absolutely NOT cash rich. The vast majority of his "wealth" is tied up in real estate which is NOT a liquid asset in the best of economic circumstances (global or personal). If you have thirty days to raise $355 million dollars, you are NOT going to get top dollar on anything you are selling with a gun to your head.
This immediate demand for cash is even more dangerous to Trump than it first appears. The vast majority of his empire is debt financed and seemingly none of it is on a cashflow glide path to reach a safe, predictable payoff at future scheduled dates. Much of his financial business plan involves continually refinancing loans and deferring the inevitable recognition that the business plan is not producing cash streams able to sustain the debt load. There are likely notes coming due every year that require SOME cash to toss at banks as fees and premiums to convince them to re-finance. Already, no American banks were willing to loan him money. He now has ZERO free cash to provide those incentives. Anything he sells off to produce cash can trigger further write-downs of remaining assets which can trigger debt covenant language to call in other notes.
The ruling requires the existing Independent Monitor to provide a summary within 30 days of any additional authorities she needs to ensure compliance of the operating companies during the three year period. The language says:
Within 30 days of this Decision and Order, Judge Jones shall submit a proposed order to the Court outlining the specific authority she believes that she needs to keep defendants honest, and the obligations of defendants, to effectuate a productive and enhanced monitorship going forward.
Given the nature of the defendants, it would appear that request will need to include some sort of flux capacitor based technology to generate the energy required to reverse time and undo seventy years of criminal entropy unleashed by Trump's warped psyche.
The babysitter restrictions for external monitoring require Trump's companies to provide sixty days notice to the Independent Monitor prior to any transfer of funds between companies or any attempt to borrow new money. He cannot simply shift assets to Florida incorporated businesses and anyone offering to loan him money will undergo public supervision. This is obviously required for preventing new fraud (and potential new corruption with foreigners trying to buy influence with someone who MIGHT become President again). It also imposes significant logistical delays in ANY deal Trump needs to land to unload a property to raise cash. All of this works AGAINST Trump and FOR any potential buyer, putting MORE downward pressure on all of the assets.
Part of the judge's ruling explains the context of the penalties by describing the track record of fraud in Donald Trump's career. As the judge said in the ruling, This is not defendants' first rodeo. He goes on to itemize the 2013 suit for fraud related to Trump University costing Trump $25 million, the 2018 lawsuit for fraud related to the Donald J. Trump Foundation, a 2022 settlement between the Washington DC Office of Attorney General and Trump regarding excessive payments paid to Trump by the 58th Inaugural Committee for use of the Old Post Office building Trump operated. He then goes on to mention that WHILE UNDER TRIAL FOR THIS FRAUD, the Independent Monitor identified additional actions taken by Trump which violated the interim agreement via unauthorized transfers of moneys, etc. Perhaps the coup de grace was a mention that oh, BY THE WAY, you haven't even hired a new CFO after "firing" Allen Weisselberg so you've been operating this multi-million dollar enterprise with zero executive financial supervision.
As MSNBC commentator Andrew Weissmann put it, the requirement that Trump be banned from operating any company in the state of New York for three years and the requirement of continuous Independent Monitoring of the existing corporations raises an important point for voters in November. You're running for President to control the financial books of the entire country and a judge has ruled you cannot be trusted to touch a single aspect of one company in one state? Why should you be trusted to run the United States of America?
WTH
