NEW YORK: Donald Trump's US$175 million bond to cover a possible civil penalty for fraud is inadequate because the company underwriting it is too small and opaque, New York's attorney general said in a filing Friday.
The 77-year-old real estate magnate, the presumptive Republican nominee for president, is facing unprecedented legal headwinds in New York where he is also on criminal trial for allegedly covering up hush money payments to a porn star on the eve of his 2016 election victory.
Trump was ordered to pay US$355 million, rising to US$454 million with interest, after being found liable in February for inflating his assets to benefit from favourable loans and insurance terms.
The demand was frozen pending an appeal – on condition Trump secure a bond that would be executed if he lost his legal challenge.
New York Attorney General Letitia James, who brought the case against Trump, wrote that Trump's team "fail to meet their burden of establishing that there is sufficiently secure and ascertainable collateral backing the bond."
James also argued that the bond's underwriter is not dependable as it relies on lax offshore financial regulations to be able to bolster the amount it has in "surplus" – the cash on hand it would need to partially pay the penalty for Trump should he lose.
The underwriter, Knight Specialty Insurance, is a "small insurer that is not authorized to write business in New York," James said.
Trump had originally been required to secure a bond for the full amount of the penalty, but an appeal court reduced that to US$175 million.
The judge in the case, Arthur Engoron, will hear arguments about the acceptability of the bond on Monday at the same time that Trump will be in a Manhattan court next door for his criminal trial.--AFP
