Financial Judgments Poised to Reveal Truth About Trump’s Wealth | Politics

Financial Judgments Poised to Reveal Truth About Trump’s Wealth | Politics

It has been written about Donald Trump that he trades in bravado, playing “to people’s fantasies” to build a brand.

“A little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular,” said a book about the former president’s business strategy.

“Truthful hyperbole,” the book said, is “an innocent form of exaggeration – and a very effective form of promotion.”

The author of those words was Donald Trump himself, promoting himself and his purported business success in his 1987 book “The Art of the Deal.” And as Trump faces the possibility of being on the hook for hundreds of millions of dollars in legal penalties, Americans may finally learn what part of Trump’s perpetual verbal autobiography is real, and what is bravado.

How much money does Trump really have? Is he “really rich,” and not in need of anyone’s else’s money, as he has repeatedly bragged, or will he be unable to come up with the cash to pay two separate judgments after having been found guilty of defaming writer E. Jean Carroll – as well as a looming judgment in a civil fraud case, where the New York prosecutor is seeking a $370 million penalty?

The courts, having access to financial information not entirely available to wealth-estimators such as Forbes and Bloomberg, are going to find out. The results will either buttress Trump’s claims of massive wealth or expose him as a poseur. And mounting judgments could force asset sales that leave the Trump empire weaker.

“He literally was a showman” as a businessman, says Loyola Law School professor Laurie Levenson. “That works until people peek behind the curtain. Until a court issues an order, you don’t have to show them the money,” Levenson adds – but that time is coming.

So far, Trump has paid $5.5 million to the court while the first Carroll defamation case is under appeal. She would get the money if he loses his appeal, and he would get at least some of it back if he prevails in the appeals process.

The second judgment, for $83 million, is a bigger hit to his pocketbook and presents him with other options. He could pay it to the court while that case is under appeal or he could post a bond. That, however, would mean paying interest and possibly a deposit and collateral.

The biggest potential judgment comes in the civil fraud case brought by New York Attorney General Letitia James. The court has already determined that Trump committed fraud by securing loans through false financial statements – including inflating the value of his properties.

The fraud case is more complicated, experts say, since there was no clear victim identified. Trump may have exaggerated his wealth and holdings, but since he ended up paying his loans, no one suffered financially because of it.

“Frankly the evidence of ‘unjust enrichment’ is pretty weak,” says Syracuse University law professor Gregory Germain, an expert on taxation, commercial law, bankruptcy and corporate law. Still, analysts note, that doesn’t mean Trump should get a pass, any more than someone caught driving 120 miles an hour on the highway should be excused just because no one got injured as a result.

Judge Arthur Engoron, who will deliver the judgment on financial damages as well as the fate of Trump’s businesses in New York, hasn’t been sympathetic to the idea that Trump’s fraud caused no harm.

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Financial Judgments Poised to Reveal Truth About Trump’s Wealth | Politics

“A lie is still a lie,” the judge said during the trial. And Trump’s antics during the trial have not endeared him to Engoron, Germain says, predicting that “the judge is going to do a number on him. He’s going to try to justify everything he can.”

The court can either demand that Trump pay up-front while the appeals process proceeds or allow Trump to put up a bond or some other sort of security, explains New York University Law School professor Anna Cominsky. That process will provide an insight into Trump’s wealth and his liquidity, experts say.

If Trump ends up with close to a half billion dollars in judgments against him, does he have the cash on hand to just pay it, pending appeal? A “no” would send a clear signal of how much money the former president really has – and how much is in properties Trump has already been found to have overvalued.

The former president has already shown he is either unwilling or unable to write a personal check to cover his legal woes: According to Federal Election Commission reports released this week, two of Trump’s campaign committees – the Save America leadership PAC and the Make America Great Again PAC – paid a combined $55.6 million on his legal bills in 2023.

The former president will surely rack up more legal fees this year, as he defends himself in four separate criminal cases.

If he can’t pay the judgments in cash, he might have to sell some of his properties, and that levies a “double whammy” on Trump’s financial situation, says William Thomas, assistant professor of business law at the Stephen M. Ross School of Business at the University of Michigan, since those assets would be unloaded in a “fire sale” that does not benefit Trump.

In real estate, investments pay off over years, if not decades, says Thomas, whose research explores the foundation of corporate and white-collar crime.

“If you’re forced to liquidate, it’s going to cost you. And we could easily see a situation where Trump finds himself essentially forced to liquidate some of his assets in order to cover the combined judgments he’s facing,” he adds.

In cases of massive judgments under appeal, judges tend to let people put up a reasonable bond, Thomas says, since it would be unfair for someone to lose properties permanently to pay a penalty later overturned or reduced on appeal.

But that also means Trump would have to convince an entity to offer him a bond (essentially a loan) – and that might be harder, given that Trump is facing trial on 91 felony charges and the fact that he has already been found to have exaggerated his holdings, experts say.

The judge may also accept James’ request to ban Trump permanently from doing business in New York – and ban his adult sons from operating businesses in New York for five years, further hamstringing Trump and his family’s ability to pay what the court demands.

A final solution for Trump would be to declare personal bankruptcy – a move that would erase the image Trump has spent many decades burnishing.

“He has always marketed himself as some genius businessman. A genius businessman should not have hundreds of millions of dollars in judgments against him,” Levenson says.

And if he can’t – ultimately – pay, the curtain long covering Trump’s business acumen and wealth will be opened.