Trump’s Lucky Break
A New York appeals court threw him a lifeline—but the road ahead is long.
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Donald Trump has built up his reputation as a rich guy. When he ended up unable to cover a massive bond, the courts threw him a lifeline, but just for now.
First, here are three new stories from The Atlantic:
- The aftermath of the Baltimore bridge collapse
- The Supreme Court is shaming itself.
- The war at Stanford
A Temporary Reprieve
Yesterday, Donald Trump was thrown a lifeline. As the deadline approached for him and his co-defendants to pony up a $464 million bond in a New York State civil fraud case, an appeals court reduced the amount to $175 million and issued a new 10-day deadline to post the bond.
The case, in which a judge ruled last year that Trump had lied about the value of some of his properties, has become a financial headache for the former president—and a blow to his reputation. Trump’s public image leans heavily on the persona of a “deals guy” that he has been peddling for decades; he has long touted his own wealth, but it seems that he did not have the cash on hand to pay the astronomic bond the courts initially demanded. His lawyers called securing such a large bond a “practical impossibility” and requested the bond amount be lowered to $100 million. Trump had been scrambling to come up with the money for the bond, and roughly 30 companies had reportedly rejected his appeals for help.
This reprieve is a “lucky break,” for him, my colleague David Graham told me. “It’s really remarkable how often Trump seems to get windfalls like this out of nowhere.” But it is also, by definition, temporary. “This is far from over,” Caroline Polisi, a white-collar defense lawyer and a lecturer at Columbia Law School, reminded me, adding that she was not shocked by the decision, which came from a notoriously pro-business court. “A bond is only meant to secure faith that the litigant will actually eventually have the ability to make the payment,” she explained. It does not necessarily have any bearing on the amount of a later penalty, which could still be $464 million—nor does it reflect the court’s view on how appropriate such a fine would be.
Although this stay is convenient for Trump, it also makes some sense from the perspective of the attorney general’s office. As David noted in his recent article, seizing assets to guarantee a bond could have created a mess for the attorney general’s office if Trump ends up winning his appeal to reduce the final penalty, or manages to convince a court that Judge Arthur Engoron’s decision was wrong. What this bond does, Polisi said, is let the appeals process play out. Trump’s assets aren’t going anywhere, and the court appointed a monitor “to make sure no funny business is done between now and the eventual final ruling,” she explained. Getting Trump in a position to have liquid assets on hand is actually better for the state, she noted. It seems easier for them to accept cash than it would be to go through the arduous process of seizing properties and placing liens on various businesses.
Trump’s true net worth remains murky. A good deal of his money is tied up in nonliquid assets such as real estate, or set aside for payments in his other legal battles, as he faces 91 felony counts in state and federal courts. Although not every case would involve a financial penalty, he already posted a $91 million appeal bond in the E. Jean Carroll judgment earlier this month.
Declaring bankruptcy is an obvious move for someone with financial woes. But beyond the potential embarrassment it would bring upon Trump—he has repeatedly used corporate bankruptcy in the past, though he is quite touchy about the subject now—there are a few practical reasons he is unlikely to pursue that path, David explained. Debts such as fraud judgments in the New York case are generally not dischargeable, meaning that he couldn’t shake them off by declaring bankruptcy. Going bankrupt would also require him to open up about his finances, including naming his creditors. Depending on who they are, that could lead to reputational or political damage, David noted.
Trump’s financial saving grace may come from his media venture. On Friday, in an eleventh-hour deal, his on-paper net worth skyrocketed when his company Trump Media (the parent company of Truth Social) merged with a special-purpose acquisition company, also known as a “blank check” company that helps private businesses go public quickly. Trump Media started trading on Nasdaq today, and the former president’s shares are already worth about $4.5 billion on paper, though restrictions in place would prevent him from using or selling shares of the company for six months—unless the board, which is made up of various loyalists, including his son Donald Jr., agreed to remove the restriction.
Even as he navigates choppy financial waters, Trump has not relented in pumping up his own valuation: Last week, he claimed on Truth Social that “THROUGH HARD WORK, TALENT, AND LUCK, I CURRENTLY HAVE ALMOST FIVE HUNDRED MILLION DOLLARS IN CASH.” (The basis for that claim is unclear.) Trump rode to the White House in part based on the public impression—one he meticulously curated—that he was a high-rolling businessman. The civil fraud case has cut to the core of how he presents himself to the public, but the courts have given him a break—and in the end, his voters might, too.
Related:
Today’s News
- The Supreme Court heard oral arguments in a case that could restrict national access to the abortion pill mifepristone.
- The judge in Trump’s New York criminal trial issued a gag order for the former president, who will not be allowed to attack prosecutors, jurors, and witnesses.
- In the early morning, a cargo ship in Baltimore lost power and struck the Francis Scott Key Bridge, which collapsed immediately. Six people are missing and presumed dead.
Evening Read
A Drug Half as Good as Ozempic for One-30th the Price
By Daniel Engber
Amid the hype around the GLP-1s, with their multibillion-dollar sales and corresponding reputation as a modern miracle of medicine, a sort of pharmaco-amnesia has taken hold across America. Patients and physicians alike have forgotten, if indeed they ever knew, that the agents of the “weight-loss revolution”—Ozempic and Wegovy, Mounjaro and Zepbound—are just the latest medications for obesity. And that older drugs—among them Qsymia, Orlistat, and Contrave—are still available. Indeed, the best of these latter treatments might produce, on average, one-half the benefit you’d get from using GLP-1s in terms of weight loss, at less than one-30th the price.
More From The Atlantic
Culture Break
Read. Vinson Cunningham’s new novel, Great Expectations, is a political satire about the failed promise of Barack Obama’s early years, Danielle Amir Jackson writes.
Create. The legendary music producer Rick Rubin wants people to know that everybody is an artist because we can all “perceive,” James Parker writes.
Stephanie Bai contributed to this newsletter.
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