The news that Trump cannot produce the $465 million bond needed to appeal the civil fraud judgment against him in New York has led to a collective nodding of sage heads — “We knew he was full of net-worth shit.” For proof, the financial solons of the chattering class can now point to Trump’s own lawyers’ words. In a brief they filed with the New York Appeals Court they confusingly call him both rich and poor.
Let us have a look at it. (I have removed the case references and legal identifiers as this piece is for non-lawyers.)
REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF A STAY PENDING APPEAL PURSUANT TO CPLR 5519©
In a classic case of pasta flinging, Trump’s six lawyers start by providing six pages of case law, constitution commentary, media articles, and social media posts. This exuberance of excess reflects Trump’s chief — and probably only — viable legal strategy. Baffle them with bullshit.
Note: The brief is 4919 pages long — mainly because the authors have included the entire trial transcript. Perhaps that is a legal requirement. But I suspect it is because, if you printed it out, it would be almost two feet tall (I looked it up). And that looks impressive sitting on a desk.
Next, they get to the ask.
INTRODUCTION AND SUMMARY OF ARGUMENT
The Court should stay execution of Supreme Court's Decision and Order After Non-Jury Trial of February 16, 2024.
First, they reject NY AG, Letitia James’ claim that the appeals court lacks the authority to waive the bond requirement either in full or in part.
The Attorney General's leading argument — that this Court lacks authority to waive or reduce appellate bond requirements under any circumstances — contradicts the plain language of CPLR § 5519(c), this Court's inherent authority, and a host of New York cases.
To bolster their point, Trump’s team provides a sea of case law for the appeals judges to consider.
They then imply that those judges will reduce the penalty or overturn the verdict. And they say Trump cannot get a bond because of “exigency or hardship”. Words that, in a financial case, mean “he does not have the money and no one will give it to him.”
In deciding whether to enter a stay, the Court may consider "any relevant factor, including the presumptive merits of the appeal and any exigency or hardship confronting any party.” Here, Defendants' ongoing diligent efforts have proven that a bond in the judgment's full amount is "a practical impossibility."
The lawyers explain they gave the bond issuance the old college try — but no soap.
These diligent efforts have included approaching about 30 surety companies through 4 separate brokers.
They then revisit their paradoxical argument that although the client is too poor to put up cash or secure a bond, the state of New York (in the person of NY AG James) has nothing to worry about because their client is really rich.
The case involves no actual victims and no award of restitution, and she is fully protected by Defendants' real-estate holdings. This factor alone warrants a stay.
Knowing that argument is probably a non-starter, Trump’s legal team tries the “trial court screwed the pooch” defense.
The manifold errors in Supreme Court's (In NY that is the trial court) judgment further warrant a stay.
Helpfully, they next enumerate the “manifold errors” — adding some gratuitous insults for flavor.
- Supreme Court disrespectfully disregarded this Court's previous ruling in this case that the statute of limitations applies.
- Supreme Court ridiculously valued Mar-a-Lago, in Palm Beach, Florida, as being worth "between $18 million and $27.6 million, "understating its actual value by about 50 to 100 times. [Note: that would give MaL a value of $900 million to $2.76 billion — the most expensive private real estate sale in the US to date is $240 million]
- Supreme Court imposed a massive disgorgement award in the absence of any evidence that the alleged misrepresentations caused the supposedly ill-gotten proceeds.
- Supreme Court double- and triple-counted damages, and committed elementary errors in the process.
Then they threw in the obligatory “It’s unconstitutional” argument. And add that the government is picking on their client.
These errors establish that the disgorgement award is unconstitutional. It is "grossly disproportional" in violation of the Excessive Fines Clause of the United States Constitution and a parallel clause of the New York Constitution, as well as basic principles of due process and selective prosecution.
They then trotted out the “no one got hurt defense” — which is like arguing that a drunk driver does not commit a crime until they hit someone. To illustrate their belief the penalty was excessive, they add a quote from the Wall Street Journal opinion pages without explaining how that bastion of conservatism’s take is legally relevant.
The $464 million penalty in this case has been aptly described as "using a Hellfire missile to annihilate an [alleged] shoplifter." The Editors, Trump's $355 Million Civil Fraud Verdict, WALL ST. J. (Feb. 17, 2024). "
They also fail to mention that Trump has called for the extra-judicial execution of shoplifters. They then get to their “ARGUMENT”, which seems odd as they have already been arguing. They start by reiterating their previous point that AG James is wrong to say the appeals court cannot dismiss the bond.
ARGUMENT
I. This Court Has Discretion to Stay the Disgorgement Award.
The Attorney General argues that under CPLR § 5519(a)(2), this Court has no authority to stay execution on any condition other than an undertaking in the full amount of the judgment.
They then added some more insults — presumably under instructions from the boss. The reader will have to decide how much James’s gender and race play a role in their invective.
This argument is meritless, and is a continuation of the Attorney General's consistent lack of respect for the authority, jurisdiction, and impact of this Court.
The lawyers then provide four pages of legal support for their position. How relevant any of it is, the Appeals Court will decide. Next, they beg for a delay (again).
II. This Court Should Exercise Its Authority To Stay Execution of the Judgment.
This Court should stay execution of all portions of the Supreme Court's Decision and Order, including both disgorgement, and other forms of equitable relief.
Because:
- A. The Attorney General Misstates the Governing Standard.
- B. The Exigency and Hardship to Defendants Warrant a Stay.
It is the second excuse where things get interesting. They break down their reasoning.
1. Posting a Full Undertaking Is a Practical Impossibility
In the Opening Brief, when their efforts to obtain such a bond were still ongoing, Defendants stated their expectation that it would be "impossible to secure and post a complete bond." Diligent efforts since that time, including "countless hours negotiating with one of the largest insurance companies in the world," have proven that "obtaining an appeal bond in the full amount" of the Judgment "is not possible under the circumstances presented."
The amount of the judgment, with interest, exceeds $464 million, and very few bonding companies will consider a bond of anything approaching that magnitude. The remaining handful will not "accept hard assets such as real estate as collateral," but "will only accept cash or cash equivalents (such as marketable securities).
So much for Trump’s claim to have $400 million cash on hand. Most sane people knew that was bullshit anyway. But let us also do a thought experiment. Is it true that “very few bonding companies will consider a bond of anything approaching that magnitude?” What if, instead of a Trump, a verified multi-billionaire with good credit and legitimate assets in the billions asked?
Even Trump’s layers undermine their contention that bond companies do not offer sizable bonds by explaining that a sizable bond would cost a lot. Why bother to discuss a hypothetical unless it is not a hypothetical?
Moreover, sureties would typically "require collateral of approximately 120% of the amount of the judgment," which "would require Defendants to hand over collateral in the form of cash or cash equivalents of approximately" $557 million. In addition, sureties would likely charge bond premiums of approximately 2 percent per year with two years in advance - an upfront cost over $18 million.
The lawyers return to gratuitous insults.
The Attorney General speculates, without evidence and revealing her misunderstanding of basic business practices, that sureties might accept "an irrevocable letter of credit" as collateral.
Ignorance of basic business practices? Are they aware that their client had a long-term CFO who was unaware of Generally Accepted Accounting Practices (GAAP) — a holy writ in the business world?
The lawyers then play the sympathy card with a “We’re also thinking of you” kicker.
The practical impossibility of obtaining a bond interferes with Defendants' right to appeal and threatens this Court's appellate jurisdiction.
Boo hoo. Trump joins the millions of other Americans who do not enjoy full access to the legal system because they do not have the money for ‘pay to play.’
Next, they try the “they don’t need the money right now” tactic.
2. A Stay Will Impose No Cognizable Hardship on Plaintiff.
By contrast, there is no significant exigency or hardship to Plaintiff. First, there are no victims, as there were no damages and no financial losses. Second, Defendants' real estate holdings — including iconic properties like 40 Wall Street, Doral Miami, and Mar-a-Lago — greatly exceed the amount of the judgment.
Oh, please! “Iconic” has no legal meaning. Worse, the lawyers argue that the properties are so valuable there is no risk Trump cannot pay, right after they claim that they are not valuable enough to secure Trump a bond.
Next, the lawyers argue that the stay allowing Trump to continue doing business in New York should remain in place.
C. The Court Should Maintain the Interim Stay as to Non-Monetary Relief.
The interim stay extends to the injunction against the individual Defendants "from serving in the financial control function of any New York corporation or similar business entity registered and/or licensed in New York State, and/or serving as an officer or director of any New York corporation or other legal entity in New York," and "which enjoined certain individual and corporate defendants from applying for loans from any financial institution chartered by or registered with the New York State Department of Financial Services for three (3)years." The Court should maintain these aspects of the stay pending appeal.
Fine. Throw the guy a bone. As long as the federal monitor stays in place and Trump posts the bond. If he cannot, then shut his ass down.
Then Trump’s team gets to their biggest swing and pray.
D. The Disgorgement Award Will Not Survive Appellate Review
They devote 60% of the brief to this point. It is so important to them that the spaghetti really starts flying. They cite all manner of cases and legal authorities. Luckily, we do not have to worry about it. The Appeals Court Judges are the ones who will have to wear the hip-waders.
However to give the reader a sense of their argument, here are their headings
- 1. The Judgment Contradicts This Court's Statute-of-Limitations
- 2. Disgorgement Requires a Showing of Causation
- 3. Supreme Court's Valuation of Mar-a-Lago Is Indefensible
- 4. Supreme Court Triple-Counted Damages on the Old Post Office Sale
- 5. The Award Is Grossly Disproportionate and Unconstitutional
Finally, they get to the end.
CONCLUSION
For the reasons stated, this Court should stay the execution of the monetary portion of the judgment without requiring the posting of an undertaking, and maintain all other aspects of the interim stay granted on February 28, 2024.
If the Court considers denying a stay on any issue, Defendants respectfully request that this Court schedule this stay motion for oral argument at a time of the Court's convenience.
In the event that this Court declines to grant a stay, Defendants respectfully request that the Court grant Defendants permission to appeal to the Court of Appeals and enter a temporary stay to allow them to seek relief from the Court of Appeals
In brief, they ask the Court to let Trump appeal without putting up any bond. If that is a no-go, they want to avoid putting up a bond until they can have a face-to-face. And if that does not work, they want permission to go over the Appeals Division to the Court of Appeals.
The quality of their work is suspect. But you cannot debate the quantity.
(Note: In New York, the trial court is called the Supreme Court. Above them are the four appellate divisions of the Supreme Court. And at the top of the heap is the State Court of Appeals. Did Rube Goldberg come up with the nomenclature?)