Trump succeeded at identifying a firm to post his $175 million dollar bond required to appeal his New York State fraud judgement. The bonds have been backed by a firm named Knight Specialty Insurance based in Los Angeles and owned by billionaire Don Hankey. His firm makes money on sub-prime car loans. Hankey himself is estimated to be worth $7.4 billion. According to Hankey, the collateral offered up by Trump was cash and "investment grade bonds." The exact split isn't clear nor the exact nature of the "investment grade" bonds.
The reduction in the bond amount was frustrating and it would have been nice for the full amount to have triggered an earlier reckoning of the true state of Trump's finances and bring the entire charade down earlier rather than later. However, even with this $175 milliion dollar bond posting, Trump's financial position is still equally perilous. First, consider the bond amount and the amount Trump was likely required to provide as collateral. Even if that share was only twenty percent of the bond, that collateral amount would be $35 million dollars. That means Trump has locked up at least $35 million dollars of cash and bonds which CANNOT be used as collateral in ANY other financial transaction until Trump wins his appeal.
Ignore the question of whether Trump will win or lose the appeal. By securing this bond and enabling an appeal, Trump has now guaranteed this fraud cause will be tied up in litigation for at least another year, likely two. That means all collateral tied to this bond is unavailable for Trump to use for any other purpose for as long as he pursues his appeal. If he wins his appeal, things are great. If he loses the appeal, he actually owes the original judgment which at this time has NOT been reduced and still totals $454 million dollars.
Of course, what cannot be known at this point is where Trump's actual cash bankrupt point is. Clearly, there are two data points on a graph that might help find that point. One at $454 million or some fraction of that which he was UNABLE to raise and another at $175 million and some fraction of that which he WAS able to get someone to accept. It would seem pretty clear however that this bond deal has essentially zeroed out Trump's liquidity. Sure, he might have another twenty to forty million in loose change in the couch in the penthouse at 40 Wall Street or the spare bathroom in the ballroom at Mar-a-lago. However, for a businessman with BILLIONS in debt obligations with huge refinancing fees looming every year and enormous penalties he is likely to remain obligated to pay, he has used up all of his spare oxygen.
The key point for Trump is by "winning" this battle to find a way to pay this $175 million dollar bond, he has now turned perhaps his only beneficial legal strategy, DELAY, into the means of his own financial destruction. When Trump left office in 2021, his business had nearly $900 million in loans coming due over the next four years. Despite the threats of indictment that began looming immediately, he managed to refinance most of that $900 million but he still had another $780 million dollars worth of loans coming due between now and the end of 2028. A Forbes reporter recently attempted to itemize those loans
https://www.youtube.com/watch?v=dWgb8gVPrks
https://www.youtube.com/watch?v=FWAT-K3SqdQ
and the list included these deals:
- July 6, 2024 - $12 million related to Trump Plaza
- July 2025 -- $121 million on loan for ground rights to 40 Wall Street (not the building itself)
- August 2026 -- $6 million on loan for Trump International Hotel
- $360 million still owed as a minority partner in a building in San Francisco
- $284 million still owed as a minority partner in another building in New York
- his Doral golf club in Miami
- his Seven Springs estate in outstate New York
Most of these have been collateralized and converted into bonds so the risk of him defaulting has been transferred to presumably thousands of faceless individual investors. There is certainly nothing in Trump's business history that indicates he will lose sleep over stiffing thousands of additional investors. However, it is not clear if he can effectively maintain the illusion of successful billionaire if every one of these loans gets written off.
WTH
