by The face-off between Donald Trump and Letitia James, New York’s attorney general, could reach a denouement as early as Tuesday when James accepts the legal right to begin seizing the former US president’s assets in lieu of a $454 fine if Trump says he can. t meet together.
But no one expects Anthony Miranda, the sheriff of New York city, to show up at the Trump property and home on 5th Avenue for the first time to see the faux-Louis XIV furniture, the golden cherubs, crystal chandeliers or the 24-carat gold to chisel out. the arches and cornices, may be disappointing.
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Collecting a financial judgment is a slow and arduous process, according to New York real estate attorneys, especially when the assets that could be seized to satisfy that judgment are property in a complex web of ownership and title, subject to mortgages and joint ownership. demands.
The same problem Trump says he faces in raising a bond against his property is the same problem James could find himself liquidating his assets to satisfy the penalty after her fraud trial to win against Trump’s real estate empire.
“People don’t like to use property bonds as collateral because it’s hard to liquidate the asset if there’s a default,” said Adam Leitman Bailey, a real estate attorney, “and it’s not that easy for the attorney general either. It will be very difficult to seize his property. It takes a lot of work.”
First, James’ office is likely to send a letter of intent to all banks in New York and the US requiring them to freeze Trump’s bank accounts and deliver cash, bonds or assets in safe deposit boxes to his New York office.
Last week the New York Attorney General’s office filed judgments in Westchester County, home to Trump’s Seven Springs private estate and golf course, a sign that James is preparing to move on his real estate assets.
That comes as Trump awaits a decision from an appeals court in New York on his request to block the judgment. The court can deny it or decide not to say anything, leaving James free to act. Trump has said in his affidavit to the court that he does not have $454m so the next step is to seize his money and property.
Bonds People do not like to use property as collateral because it is difficult to liquidate the asset if there is a default … It will be very difficult to seize his property
Adam Leitman Bailey
“If he doesn’t get to stay … I don’t see a good solution for him,” says Mitchell Epner at Rottenberg Lipman Rich in New York. “James can go back to … court and seek an order requiring her to be given property interest, and Trump would have very limited ability to oppose that.”
James has said that she looks out of her office window at 40 Wall Street, a 72-story neo-Gothic tower built in 1929 before the economic crash and once owned by Ferdinand and Imelda Marcos, that Trump acquired the land lease 99 year on in 1995 for $1m.
“We’re happy to make sure the judgment is paid to New Yorkers,” James told ABC News in a tone of barely concealed disdain after the February verdict. “And yes, I watch 40 Wall Street every single day.”
But, according to Epner, James would not send the sheriffs around to lock the doors and lock the tenants out.
“The purpose of allowing a judgment creditor to take possession is not to injure innocent third parties, but to guarantee payment. If the court were to order the building to be turned over, the question would then be how do we do this without causing unnecessary harm to the tenants.”
But New York is going through a commercial real estate crisis, and 40 Wall Street, despite being surrounded by high-end stores like Tiffany and Hermes is no exception.
In 2014, mortgage lender Capital One valued it at $257m, although Trump estimated it at $550m on its annual financial statement. About $120m is owed on a mortgage.
“Trump doesn’t own the property,” Bailey says. “They could sell the ground lease but the real estate market in commercial property is so low right now it’s hard to know what would come of it, especially with inflated assets like Trump has.”
Additionally, there is no certainty that the court’s $454 judgment will make it through the appeals process. Verdicts can be overturned on appeal, and the prosecution in the case rarely – if ever – used a statute of law used for this purpose.
Trump’s legal team has argued that if the attorney general sells his property, and if the judgment is reversed or the fine is reduced, his company would be irrevocably damaged.
In addition, James must hope that Trump has not placed his properties in an irrevocable trust for his children in which he collects the interest but no longer has control. “The attorney can’t touch anything in an irrevocable trust,” Bailey said.
If it is held in a limited liability company with other parties, and James tries to seize and sell it, that would start a series of lawsuits before there is a foreclosure. Even if successful, the bank holding any mortgage would take repayment priority over the state after an auction.
“Letitia James will be able to get the cash and the furniture but that won’t be close to the verdict,” Bailey said. “James probably knows that she used a prudent statute that was not intended for this type of case, and he knows that the decision will be reduced on appeal. If she gets $100m that’s good news for her.”
But on Friday, the prospect that Trump will come through the judgment of $ 454m suddenly looked. His Trump Media & Technology Group – the parent company of the Truth Social platform – completed Spac’s merger with Digital World Acquisition Corporation, valuing his undertaking at around $3bn.
If shares in the company start trading on Monday they could theoretically be used as collateral for a bond that would keep James off his back while Engoron’s judgment is appealed. But that’s a long shot.
“If I were Donald Trump, I would be calling every US billionaire I know to ask them to borrow the money,” Bailey said. “He needs a sugar daddy to come in now and bail him out.”
