New York Attorney General Letitia James has the option to utilize the funds owed by adult film actress Stormy Daniels to Donald Trump as a means to contribute towards the $454 million judgment in the civil fraud case against him.
The deadline for Trump’s case is quickly approaching on March 25. If the former president fails to pay the substantial fine or secure a bond by then, James will have the authority to collect the $454 million judgment issued by Judge Arthur Engoron just last month. In her civil fraud case, she accused Trump of misleading banks and insurers by exaggerating his financial worth on loan applications and business transactions.
James has the authority to seize both Trump’s bank accounts and properties. Additionally, she has the power to pursue any outstanding debts owed to the potential Republican nominee for president.
Daniels’ failed defamation suit against Trump has left her owing over $600,000, including the additional $121,972 in legal fees that she was ordered to pay last year.
According to Harmeet Dhillon, Trump’s lawyer, as of Thursday, all the money owed by Daniels is still unpaid.
Stormy Daniels has made it clear in the past that she would rather go to jail than give a single penny to Donald Trump. Newsweek reached out to Daniels for her input on the matter via email.
According to Bernard D’Orazio, a New York attorney specializing in debt collection, James, as the victor in the civil fraud case, is entitled to seek enforcement of the judgment. This includes collecting any outstanding debts owed to Trump.
D’Orazio explained that if Daniels is indebted to Trump, the NYAG has the authority to pursue legal action to enforce the repayment of the debt.
In court filings on Monday, it was disclosed by Trump’s attorneys that he has been facing challenges in securing an insurance company to support the bond required to prevent James from enforcing the $454 million judgment while he pursues an appeal. They revealed that Trump has approached 30 underwriters, but due to the significant amount of the judgment and the preference for cash over property by underwriters, he has been unsuccessful in obtaining the bond.
According to the news, it was indicated that James would be making progress towards taking control of Trump’s assets as he continues his legal battle against the $454 million judgment. Syracuse University Law Professor Gregory Germain, in a statement to the Associated Press, explained that if Trump is unable to produce the necessary funds or a bond, the state has the authority to seize and sell his assets, place a lien on his real estate, and collect any debts owed to him.
He expressed his thoughts, saying, “In the event that he is unable to post a bond or fulfill the appellate division’s bonding requirements, it is likely that he will resort to filing for bankruptcy in order to benefit from the automatic stay on collection. However, this is a complex situation, and we can only wait and see how it unfolds.”
Despite experiencing multiple bankruptcies in his businesses, Trump proudly claims that he has never personally faced such a financial setback.
According to D’Orazio, James has the authority to pursue Daniels’ money, but he may not choose to do so due to doubts about Daniels’ financial capability.
According to former federal prosecutor and elected state attorney Michael McAuliffe, even if Trump manages to collect the money owed to him by Daniels, it would only be a small fraction compared to what he owes the state.
According to McAuliffe, if Daniels ever pays the fees and costs, the funds could potentially be considered a cash asset that could contribute to the fraud judgment. However, McAuliffe clarifies that this amount of approximately $122,000 is not significant in comparison to the nearly half-billion-dollar fraud judgment against Trump and his family.
McAuliffe cautioned about the potential “seismic” repercussions that may arise due to the magnitude of the judgment, which could further exacerbate financial challenges for Trump.
According to him, if a lien or a creditor enforcement action occurs, it could activate the payment provisions of other loans. Similarly, if real estate is forced to be sold, it could potentially violate the debt covenants of other loans. He described this situation as everything falling apart like a house of cards.