Donald Trump's bond provider defends its help
Reuters
Published Apr 16, 2024 11:18AM ET
By Jonathan Stempel
NEW YORK (Reuters) - The company that provided Donald Trump with a $175 million bond in his New York civil fraud case said it had "substantial financial credibility," and rejected a suggestion by the state's attorney general that it wasn't qualified to provide help.
Trump obtained the bond from Knight Specialty Insurance Co as a guarantee so he could appeal a $454.2 million verdict that state Attorney General Letitia James won in February.
James objected to the bond on April 4 because Knight lacked a "certificate of qualification," and demanded that the insurer or Trump's lawyers "justify" the bond within 10 days. The insurer is owned by billionaire Trump supporter Don Hankey.
In a Monday night filing in a state court in Manhattan, Knight said the bond was fully backed by cash in a Charles Schwab (NYSE:SCHW) account, and that it could access nearly $2.2 billion of assets at its parent company if something went wrong.
Knight, which is licensed in Delaware, also said it has since 2021 had authority in New York to provide the type of bond Trump secured.
"By any standard, KSIC has therefore provided assurance to (James) that she can collect the designated amount if the award is affirmed on appeal," Knight said. "KSIC was and is authorized to issue the bond."
Lawyers for Trump, his adult sons and the Trump Organization signed Knight's filing.
James' office declined to comment on Tuesday. A hearing is scheduled for April 22.
Hankey made his fortune in subprime car loans, with some regulators criticizing his companies' debt collection tactics. He is worth $7.4 billion, according to Forbes magazine.
Justice Arthur Engoron issued the $454.2 million verdict after finding that Trump fraudulently inflated his net worth and real estate assets to deceive banks and insurers into providing better terms.
Trump was originally required to obtain a guarantee for the entire verdict while he appeals, but a state appeals court let him post a smaller bond.
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Written By: Reuters
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