I don't know about everyone else, but I'm having a heck of a time deciphering what Judge Engoron's ruling really means. It takes a long time to craft a well-researched article, and in this case, many experts may be unwilling to opine before they know a bit more. In any case, there are lots of articles talking about the specifics of the order, but they tend to go into sparse detail about what happens next or what the second and third-order effects are. After reading 20 or so articles on this topic, I have some guesses and more questions that I figure the folks here can answer.
First, here’s what we know for sure:
- Judge Engoron made a partial summary judgment that Donald Trump's businesses and the top executives engaged in business fraud.
- The judge cancelled his New York business licenses and required the businesses be put under the control of an independent authority.
- The judge has not yet ruled whether that means the businesses will be immediately sold or whether they will be operated by the court temporarily pending the outcome of the trial.
- The judge has not yet clarified if the order would include certain properties such as the homes of Trump's sons or Mar-a-Lago.
- Trump originally had 10 days to recommend an independent authority to execute the judge's order, but the judge extended that to 30 days.
- Trump filed a lawsuit against Judge Engoron that says the judge ignored an appeals court ruling by improperly considering old evidence. The decision on that could be as soon as today.
How Trump could still make it through this, from a non-lawyer's perspective:
- Trump's lawsuit against Judge Engoron for ignoring the Appeals Court will be decided "as soon as Thursday" (today) according to the New York Times. If Trump wins, it sounds like it would invalidate this current partial summary judgment and require the judge to rule again using less evidence. What are Trump’s real odds of victory? Also, would there be other consequences of a Trump victory here? Would the New York AG lawsuit need to be scaled down? Or, would the judge likely rule exactly the same way again, just with slightly less evidence to support his position?
- Just prior to the deadline for recommending an independent authority, Trump will appeal the ruling, causing a temporary stay of the order. I do not know enough to predict how fast the appeals court will rule, but it’s at least several more weeks, maybe months. My impression is the judge is on solid ground here, but I don't know. Anyone else have an idea?
- Most likely, the businesses will not be immediately sold and would continue to be owned by Donald Trump and his sons, but they would be run be a court-appointed executive. Trump and his sons could still make major decisions to sell or transfer property for example, etc. but only with approval. In this case, it sounds like they could still access some funds, though only limited amounts.
- Trump may request to transfer his properties out of New York's jurisdiction to other LLCs, but it is unlikely to be approved. The court would want to ensure enough money stayed in its jurisdiction to pay any fines that resulted from the court case. Thoughts?
- Trump probably has a lot of other delay and derail tactics. After all, this is an existential fight and he's willing to pay big bucks to avoid losing everything.
How this could sink Trump, from a non-lawyer's perspective:
- If the business licenses are truly cancelled, Trump might be in technical default of one or more of his bank loans. The banks would have the option but not requirement to demand immediate repayment. I have an MBA but no finance background – any financiers able to chime in?
- If the court sold Trump's property, it would almost certainly put him in technical default of some of his loans, since the collateral would now be gone.
- If Trump had to sell a property for any other reason, he could also set the cascading events below in motion.
- If multiple loans were called in at the same time, things would get interesting. Every creditor that had the ability would demand immediate repayment to avoid being last. As properties are sold, more loans would go into technical default and require immediate repayment. If Donald Trump has enough assets after selling some properties, then he'd survive but with a smaller empire. If he does not have enough assets, then he would be in bankruptcy with the inevitable result of losing almost everything. In other words, catastrophe would happen within weeks of events starting, even if it might take years for bankruptcy court to finalize the details. This could POTENTIALLY even happen before the primary — that’s nuts to think about.
- If this process begins to look inevitable, other consequences might appear. Would codefendants be more likely to make deals to testify against him in criminal trials? Would he have reduced funds to pay for lawyers in his criminal trials? Would his Republican primary opponents actually try to win instead of competing for vice president? Would Trump plummet in the polls against Joe Biden? I don't know, but all of these seem possible.
I'm still surprised that Trump has not been charged with stealing campaign funds. I know that most donations are going to lawyers right now, but I would be shocked if there isn't a strong case that he's been stealing campaign donations for his personal use since 2016, possibly laundering them through his businesses.
Right now, I am hopeful, but I have seen too many of these things change before my eyes to feel confident predicting the future. Any experts on finance, law, or business have a fantastic opportunity to provide insight to the rest of us right now.