If I use my house (or whatever) as collateral for a bond, who owns the house? I’ve been seeing talk that the titles automatically transfer when Trump loses his appeal, which implies that he still owns the assets he’s put up. Is that the case? Or is it in an escrow holding of some kind?
That’s my bet; Knight took the bond amount (plus their fee) and contractually stuck the $175 million into an escrow account that automatically goes to them if they have to pay out on the bond. NY gets their money, Knight keeps the collateral, and NY is free to go after any Trump assets to get the rest of the judgment.
I know we are all used to DJT worming his way out of consequences but in this case he won’t be able to do the things you mention. This is a state civil matter so once the appeal is done there is no other way for him to get around it. Federal pardons won’t apply and bankruptcy won’t help him get away from it either. IOW, if/when he loses the appeal, he’s done.
As has been mentioned in other posts, the money is being held and as soon as he lose the appeal it will be paid out to the state. They will also be able to begin seizing property pretty much immediately and DJT won’t be able to hold it up with frivolous court filings.
I think you’re misunderstanding me. I am not speaking at all about the bond, I was responding to the following:
I’m talking about -KNIGHT- possibly getting screwed by Trump in their attempts to recover from HIM.
i must be missing something here.
Trump puts up a brokerage account as collateral. The brokerage account goes into escrow, while $175 million of Knight’s money goes into escrow for the State of New York. Doesn’t the collateral then have to be worth at least as much as the amount of the bond? I’m thinking it would have to be worth more than the bond amount – $175 million in mutual funds or whatever today may be worth only $150 million when he loses the appeal and NY takes the bond.
Let’s assume the brokerage account currently has a value of $200 million. That goes into an escrow account. Trump also pays whatever fee Knight charges for putting up the bond. On TV, a garden-variety bond for something like robbing a bank has a fee of 10% – but I suspect in a case like this, the fee may be smaller. So assume the fee is $10 million. Trump has to pay that $10 million upfront, doesn’t he?
Scenario #1 – Trump loses the appeal. (For purposes of my question, let’s assume the $475 million penalty remains in effect.) Knight liquidates the brokerage account. To keep this simple, let’s assume they get the $200 million it was worth when put into escrow. Trump gets the $25 million that the brokerage account is worth in excess of the $175 million Knight gets for the bond. (Actually, I assume NY steps in and gets that as the first part of the remaining $300 million he owes.)
Scenario #2 – Trump wins on appeal. The brokerage account gets transferred back to him.
No matter how I look at the numbers, win or lose Trump is out the $10 million fee he paid to Knight.
Why then wouldn’t he liquidate the brokerage account himself, pay the bond, and avoid Knight’s fee?
The only way I can see this works to Trump’s benefit is if the collateral brokerage account is worth quite a bit less than $175 million. But why would Knight agree to this then? Given Trump’s history, it would seem to be a kind of stupid thing to do.
Interesting update:
https://www.cnn.com/2024/04/02/investing/trump-bond-firm/index.html
At first, Trump planned to post a mix of investment-grade bonds and cash as collateral (80% bonds and 20% cash), Hankey said. Although Knight Specialty received the bonds and approved them, he said they were not posted in the end.
“Ultimately, he put up all cash,” Hankey said, adding that he does not know where the $175 million in cash that Trump posted came from.
The suspicious part of me wonders why, if he had the cash available, he didn’t just post the bond himself (saving Knight’s fee), but who knows what evil lurks in the hearts of men, or Trump. Too much speculation for the current state of affairs and for P&E.
That’s correct. No different than a bail bond.
There is a third scenario where the award is redunced on appeal so he will owe NY less than the full amount.
I know. But what I’m asking is: is it possible that he’ll screw Knight when they try to recover from him, and that he’ll lose in court against Knight, and that he’ll then appeal, and that he’ll then have to put up a bond, and that Someone Else will put up said bond — and that, quite possibly, he’ll then eventually screw that Someone Else when they try to recover, and then lose and appeal and bond and so on and so on?
Back to this conversation point then, mostly no, because if he stiffs Knight, I don’t think anyone else will take the risk of giving him another bond to fight paying a prior one. And depending on whether he wins the next election (as mentioned earlier) he thinks he’ll be untouchable, or he’ll have so much headed his way that he can try bankruptcy or other mostly-frivolous lawfare to run out his own clock.
See, I was already thinking that Knight would think that way — and since I’d have been wrong about that, I wondered if we’re living in a timeline where folks who put up bonds can keep surprising me.
I’m sorta thinking the best outcome for non-Trumpers is if Trump suffers a moderate stroke while at one of his political rallies before the election. Not a killer, just one that leaves him with an obvious physical defect like a partial paralysis on one side AND screws up his ability to speak for at least a few months.
Without being able to deliver rabble rousing speeches and being obviously handicapped (read ‘lesser’, no longer ‘powerful’ in their eyes) – I think the bulk of his rabid followers would quickly fade away. There’s no way he could have the same effect via printed speeches, even assuming his general fans would be willing to actually read them.
Thus my linking to the CNN article where they secured Knights bond completely in CASH. Lots of wondering going on about how and why he might do that.
Why? Because it obfuscates where it came from is my guess.
Could be some schadenfraude for Serge Kovaleski.
I wonder if it was a way to get around the NY babysitter they have watching his businesses right now.
Total WAG on my part.
That’s exactly what I was thinking. If he ever had a stroke or something that caused a physical handicap, I hope someone rubs that picture in his face every day.
As I understand it, if Trump were to try to screw Knight, that would have to be by him suing them, and meanwhile, the money would still be Knight’s.
^^^^ This is also my understanding and seems to be what many don’t get. DJT no longer has access to whatever he put up to secure the bond, whether it is cash or bonds or a combo. Unless he wins on appeal this money is already gone and he won’t get it back. Unless he wins the appeal. Which he most likely won’t.
Bankruptcy does not defeat secured creditors.