Former President Donald Trump’s financial situation is facing increasing constraints as he loses control of his company. This comes at a challenging time for Trump, with legal liabilities growing and a presidential campaign to run. A recent ruling by a New York judge ordered the Trump Organization to pay $364 million in penalties and barred Trump from any role in running a business in New York state for three years.
The impact of this ruling on Trump’s business operations is expected to be significant. Randy Zelin, a professor of law at Cornell University and a veteran criminal defense attorney, believes that the ruling also provides a strong basis for an appeal. The New York Attorney General, Letitia James, had requested the financial penalty and the ban on Trump and his children from running any company in the state. The judge ruled that Trump’s children, Donald Jr. and Eric, would be barred from running any business in the state for two years.
The judge also appointed former U.S. District Court Judge Barbara Jones as an independent monitor of the Trump Organization for the next three years. Jones will have expanded powers and will review any financial disclosure before it is submitted to a third party. The ruling also mandated the appointment of an independent compliance officer within 30 days. Additionally, the Trump Organization is prohibited from applying for any loans from a financial institution in New York for three years.
Trump expressed his dissatisfaction with the ruling, calling it a “Complete and Total SHAM” and stating his intention to appeal. He accused New York State Judge Engoron of being biased and used by the “deluded” prosecutors and New York Attorney General James, whom he referred to as “Racist” and “Corrupt.” James, on the other hand, hailed the decision as a victory for accountability and the rule of law.
This ruling is just the latest blow to Trump’s legal and financial troubles. Over the past two years, he has incurred $76 million in legal costs related to various criminal and civil cases. A significant portion of the funds raised for his presidential campaign has been used to cover these expenses. Bloomberg reports that Trump may face a cash crunch caused by his mounting legal costs as early as this summer, potentially impacting his presidential campaign.
One of the significant challenges Trump may face is securing financing or using his assets as collateral. With the loss of control over his company and the court-appointed monitor, it will be more difficult for him to line up financing or freely use his assets. This could complicate matters if he wishes to appeal the recent legal verdicts against him, as he would need to put up bonds for the full award amounts.
Furthermore, Trump’s mounting legal costs and loss of control over his real estate empire put him in a worsening financial bind. He will have less control over who gets paid and how much, with the priority being to operate the business. The funds raised from political supporters to cover legal costs may not be available for his presidential campaign.
In addition to these challenges, Trump still has loans coming due for some high-profile buildings in the next few years. With the court-appointed monitor involved, securing new debt to refinance these buildings might become more difficult, potentially leading to defaults.
Overall, Trump’s financial position has become increasingly constrained as he relinquishes control of his company. With mounting legal costs, restricted access to financing, and potential defaults on loans, he faces significant challenges in managing his personal finances and funding his presidential campaign. As the legal battles continue and the presidential race heats up, it remains to be seen how Trump will navigate these financial constraints.
