Article Summary –
Former President Donald Trump has posted a $175 million bond in a New York civil fraud trial, but the bond lacks essential information, sparking concern among experts and New York Attorney General Letitia James. The company issuing the bond, Knight Specialty Insurance, is not listed in New York’s Department of Financial Services database, and does not appear to have a certificate of qualification required by New York Insurance Law Section 1111. There are also concerns that Knight Specialty does not meet the restriction under New York insurance law barring companies from putting more than 10% of their capital at risk.
Trump’s $175M Bond Under Scrutiny by New York Attorney General
Ex-President Donald Trump posted a $175 million bond in New York last week, seeming to sidestep a financial crisis. He paused the enforcement of a $460 million judgment against him after a civil fraud trial while his appeal is pending. However, the bond lacks key information typically found in such filings, according to experts.
Documents missing from the bond include those related to power of attorney for the bond provider, Knight Specialty Insurance Company, company financial statement, and a qualification certificate from the Department of Financial Services. New York Attorney General Letitia James voiced concerns about the bond after its original publication.
James objected to the issuance of the bond by a non-admitted carrier in New York, which lacks the required certificate of qualification as per New York Insurance Law Section 1111. She took exception to the sufficiency of the surety offered by Trump and other defendants.
Trump’s attorney, Christopher Kise, accused James of initiating another witch hunt and claimed her office was maintaining silence after an appellate court reduced the defendants’ bond from more than $464 million to $175 million. He further said that the Attorney General seeks to stir up a baseless public quarrel to regain relevance.
Bruce H. Lederman, an attorney, noted glaring errors in the bond and said serious issues seem to prevail. He pointed out that Knight Specialty is not listed on New York’s Department of Financial Services website.
A former assistant attorney general in New York, Adam Pollock, also stated that the bond is deficient for several reasons, including the lack of a license for the issuing company in New York and insufficient capital.
Shah, the president of Knight Insurance, defended the company’s actions, saying that the company is authorized to issue a surety bond in New York through the Excess Line Association of New York (ELANY). He further argued that New York surplus lines insurance laws do not regulate the solvency of non-New York excess lines insurers, and hence the 10% surplus rule does not apply.
The billionaire behind Trump’s bond is Don Hankey, chairman of Knight Insurance, which owns the subsidiary that wrote the bond. Hankey stated that Trump used cash as collateral for the bond. Despite this, Trump retained that $175 million cash collateral, according to Shah.
Lederman opined that the New York Attorney General is requiring strict compliance with the law and raised serious questions about whether the bond was properly posted. He further suggested James should investigate if the company complies with state law requirements. The New York Attorney General’s office declined to comment.
Knight’s updated filing included a financial statement showing the company’s surplus to policyholders is $1 billion and a joint limited power of attorney signed by Hankey and Shah.
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