Last week, Donald Trump was given a 30-day grace period to obtain a letter of credit to post a $464 million bond for fraudulently overvaluing his real estate. New York Attorney General Letitia James issued the grace period and court decision. Without a letter of credit presented to the court by Monday, authorities could begin to seize assets from his empire as soon as next week. Even though these concerns have been presented before the court, The Attorney General has not extended the time period for Trump to present a letter of intended credit.
The issue, according to Trump’s lawyers, is that no insurer will accept real estate as collateral for the payment. Underwriters require a cash equivalent of collateral to ensure their position in the deal. Trump has claimed that he has over $400 million in cash, but he would need over $550 million in cash or cash equivalents to cover the collateral and an upfront fee for the deal.
Trump’s lawyers have stated that they have held meetings with 30 underwriters, none of whom feel confident in the ability to sign off on a surety bond for the particular amount decided on by the Attorney General. Trump could use a bank as his lender, but it would be more costly because of the extra fees banks require for a deal of this size. However, they would accept real estate as collateral for signing off on a letter of credit.
