How court rulings threaten to dent Trump’s fortune and empire
JUDGMENTS in the court cases against Donald Trump have threatened to put a dent in his wealth and his business empire, while fighting the suits is draining his war chest for legal fees.
In two major civil cases in New York, Donald Trump has been ordered to make payments that could eat up much if not all of the cash the billionaire has on hand.
In addition, the former president has been barred from running businesses in New York state for three years. While the judgments are a blow to a politician whose persona is tied up with financial success and wealth, a bigger challenge to his aim of retaking the presidency in November would be an adverse verdict in any of the four criminal cases he faces.
Judgments against Trump
On Feb 16, a court ordered Trump, his adult sons, and his real estate company to return US$364 million plus tens of millions of dollars in interest in illegal profits in a civil suit filed by New York Attorney General Letitia James. The judge in the case had already ruled that Trump was liable for fraud for inflating the value of many of his assets to banks to get better terms on loans. In the new verdict, the judge barred Trump from serving as an officer or director of a New York company for three years and imposed a similar punishment, for two years, on his sons.
Three weeks earlier, Trump was ordered by a jury to pay US$83.3 million to writer E Jean Carroll for defaming her in 2019 when he denied her sexual-assault allegation and accused her of fabricating the attack to sell a book. A different jury already had awarded Carroll a total of US$5 million in damages after finding Trump liable for sexually abusing her and defaming her by repeating the same remarks in 2022 on social media.
The ex-president, who denies wrongdoing in all the cases, has a history of appealing judgments that go against him. But he may still have to part with significant cash at least until the appeals process is resolved. An appeal bond in the fraud case would probably be at least in the tens of millions of dollars. In the case of the first award to Carroll, Trump was forced to put 110 per cent of the judgment – or US$5.5 million – in escrow with the court while he appeals. He would get the money back if he wins the appeal.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Trump’s wealth
In a deposition last year, Trump described his stockpile of cash as being “substantially in excess” of US$400 million. The Bloomberg Billionaires Index placed his liquid assets at about $600 million, though Trump’s exact financial status remains famously opaque.
To be sure, the billionaire has hundreds of millions of dollars in assets he could tap to replenish his cash stockpile. He has a net worth of US$3.1 billion, according to the index.
His business empire
The consequences of the Feb 16 prohibition on Trump running businesses in New York state aren’t entirely clear. The judge pulled back an earlier order authorizing the revocation of operating certificates for Trump businesses. That order had fueled concerns from Trump lawyers that the company might have to sell off its New York assets including his Trump Tower penthouse, the 40 Wall Street office tower and the Seven Springs estate in Westchester County. The judge said a newly appointed independent director of compliance and a separate monitor could still seek dissolution in the future.
Most of Trump’s fortune is tied up in real estate, and New York properties make up about half the value of his real estate portfolio. In recent years, however, growth has come from outside the state. His Florida properties, such as the Trump Doral resort, golf courses and the famous Mar-a-Lago Club in Palm Beach, have seen revenue soar as the state booms.
Trump’s legal war chest
Trump spent US$51.2 million in 2023 on legal expenses, and can tap another US$23.5 million, most of it stashed in an allied super political action committee that he can use to pay his lawyers. But as his four criminal cases ramp up, those funds are expected to run out at a critical time – around July, just as his presidential campaign increases spending for an expected rematch with President Joe Biden.
Trump is facing mounting legal bills after being charged with 91 criminal offenses in four criminal prosecutions. There are separate federal and state prosecutions over his attempt to overturn his defeat in the 2020 presidential election. He is accused of mishandling classified documents at Mar-a-Lago. And a fourth case, accusing him of falsifying business records to conceal hush payments to an adult film actress, is set to go to trial on Mar 25.
Trump has made his legal troubles the center of his fundraising pitch to supporters and has raised millions of dollars, some of which he has used to pay his legal bills. He has remained the Republican front-runner for the presidential nomination and has even received bumps in the polls after being indicted.
So far, the court judgments against him have been in civil lawsuits. A negative outcome in any of the criminal cases would likely pose a tougher test to his candidacy. A Bloomberg News/Morning Consult poll in January found that 53 per cent of voters in the seven closely watched battleground states would be unwilling to vote for Trump in the general election if he were found guilty of a crime, a figure that grows to 55 per cent if he is sentenced to prison. BLOOMBERG
Share with us your feedback on BT's products and services
