Chubb, AXA, and other insurance giants fail to back new Trump bond
Chubb, AXA, and other insurance giants fail to back new Trump bond | Insurance Business Canada
Insurance News
Chubb, AXA, and other insurance giants fail to back new Trump bond
Lockton broker can’t find anyone to take ex-president’s $18m as Deutsche Bank downgrades his valuation
Insurance News
By
Ryan Smith
Former president Donald Trump has been unable to secure a bond to delay the enforcement of a $464 million fraud judgment against him and his businesses, according to his legal team.
Trump’s lawyers said Monday that despite negotiations with some of the world’s largest insurance companies, “very few bonding companies will consider a bond of anything approaching that magnitude.”
The fraud judgment stems from a January ruling that found Trump and his businesses liable for “blatant” fraud related to overstating the value of real estate assets to lenders and insurers. The judgment – which currently stands at $464 million including interest – can be collected by the New York attorney general unless Trump can post a bond for the full amount while appealing the case, the Financial Times reported.
Trump has pleaded with the appeals court to extend the deadline for acquiring the bond, while New York Attorney General Letitia James has raised the possibility of seizing his assets.
Insurers underwriting surety bonds generally charge a premium of up to 3% and require cash as collateral, the Financial Times reported. While Trump said in a legal deposition last year that he had about $400 million in cash, his company is private, so his actual financial situation remains murky. However, the former president is reportedly struggling to cover his mounting legal costs, and Deutsche Bank – one of his top lenders – has recently made significant downward adjustments to its own estimates of his net worth.
Bond “a practical impossibility”
After agreeing to underwrite the surety bond in the E. Jean Carroll case, Chubb was considering posting a bond for the fraud judgment, but concluded it couldn’t accept real estate as collateral, the Financial Times reported.
Gary Giulietti, head of global brokerage Lockton Companies, said in an affidavit to the court that Trump had hired Lockton to secure a bond for the case, but “despite scouring the market, we have been unsuccessful in our effort … for the simple reason that an appeal bond for $464mn is a practical impossibility under the circumstances presented.”
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Photo: Defense Visual Information Distribution Service
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