Wednesday, March 20, 2024

Legal Briefs

"A source close to the Trump family said Trump’s defense team is gaming out its options, including ways Trump could appeal Engoron's ruling without having to put the bond up and what would happen if they can’t secure the required sum. There’s also the belief that seizing Trump’s assets or liquidating them at 'fire sale' prices, as Trump has warned, could prove to be rocket fuel for his campaign," said the report. "'They’re looking to appeal the actual requirements to have to put up this amount of money to appeal and then, obviously, the appeal itself on grounds it’s a violation of the Eighth Amendment,' the source said. 'They have to figure all those machinations out.'"
The “rocket fuel” argument is dumb, because it will only appeal to voters who already support Trump. Losing Trump Tower or Bedford is not going to win Trump any new sympathy.

It’s of a piece with the Eighth Amendment shout out.
The Eighth Amendment argument is that the damages are excessive. It’s a backstop occasionally used to reduce punitive damages, but no such damages were awarded here. The only argument can be Trump’s rights are violated by the appeal bond itself (or, I guess, the judgment). The legal problem is in the AG’s brief. If this bond is not unprecedented (and I don’t think it is, but I don’t have the case citations), then the Eighth Amendment argument is almost impossible to make. It’s pretty much in line with the PRA argument Trump is making in Florida (which only Loose Cannon is dumb enough to fall for. Twice. Honestly, the woman has no business being on a traffic court bench. But I digress…). Not, IOW, a winning position.

Now let’s consider bankruptcy:
The outlet noted that the bankruptcy could give Trump a reprieve as it would delay for months and possibly years his mandate to pay back the substantial damages imposed by Manhattan Supreme Court Justice Arthur Engoron mid-February that has accrued interest by $100,000 each day. 
Trump's campaign spokesman said: “This is a motion to stay the unjust, unconstitutional, un-American judgment from New York Judge Arthur Engoron in a political Witch Hunt brought by a corrupt Attorney General. A bond of this size would be an abuse of the law, contradict bedrock principals of our Republic, and fundamentally undermine the rule of law in New York." 
Bankruptcy would also reportedly in a federal judge to help remit and make good all of Trump's creditors and give the GOP presumptive nominee bandwidth to put his energies toward stumping to win back the White House.
I left that middle paragraph in because it is the political argument Trump thinks he gets to make if James starts seizing his buildings.

The other paragraphs are sheer gibberish. Bankruptcy stays all proceedings in which the bankrupt is involved, and that includes appeals. The bankruptcy court puts a trustee in place who controls all of Trump’s property and money. The proper analysis gets tricky here, because Trump and his sons and his businesses were sued and the liability apportioned among them. In order to stay the execution of the judgment, Trump would have to file bankruptcy personally, and for all the entities in the suit. It would be the only way to protect his properties from seizure.  So the price of not paying the judgment is a Trustee who is the court monitor on steroids, taking over and approving everything Trump’s businesses do, and he does.

But that would last only as long as the bankruptcy judge allowed. Trump would be forced to divest his assets, and pay off his creditors. That may delay the judgment execution, but it won’t eliminate it. 

And Trump won’t have any “bandwidth.” He won’t be able to pay his lawyers without court approval. He can’t raise money and spend it on his lawyers or for any other reason without court approval. Violating campaign finance laws could suddenly become a very real problem, too. Trump won’t be able to treat campaign donations or RNC funds as his piggy bank without making those monies part of the bankruptcy estate, and so the property of his creditors, including the State of New York.

Bankruptcy means all of your property becomes your creditors’ property. The bankruptcy court could, for example, force the sale of Trump Tower to pay off the creditors. Or Bedminster; or even MAL. Nothing Trump could do about it, except spend more money on more lawyers. He wouldn’t be released from his burdens, they would increase.

And the simple truth is, the majority of Chapter 11 reorganizations end in Chapter 7 liquidation. Bankruptcy is not an escape clause for Trump. It’s a death sentence.
When she was asked about the possibility that her old boss and former leader of the free world might opt to declare Chapter 11 protection and give up some of his properties (save for three that he likely won't ever relinquish), Grisham started ticking off some of the talking points if that were to happen
Just a small point of clarification. Trump, individually, and his businesses, are responsible for the fraud judgment. If he files bankruptcy, they all have to go with him. And being bankrupt is kind of like being pregnant; you can’t do it a little bit. Trump can’t decide which properties go in and which stay out; and what happens to them is up to the court, not the petitioner.

Trump has put his companies into bankruptcy before. He knows how it works. Odds are he’ll never do it.
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