New York ruling deals Trump business major blow
A significant ruling handed down by a New York judge on Friday has dealt a serious blow to Donald Trump and his family business, impacting their operations in their longtime home market.
The ruling entails a hefty $355 million in fines and imposes a three-year ban on Trump’s ability to serve as a corporate officer and seek loans from New York banks. Additionally, it upholds the presence of an independent monitor, which has been a source of frustration for the Trump family, and introduces an independent director of compliance.
According to Will Thomas, a business law professor at the University of Michigan, while the business remains technically owned by the family, it is now effectively out of their control. Despite Trump’s expected appeal, legal experts suggest that avoiding the substantial penalties is unlikely. Brian Quinn, a professor at Boston College Law School, explains that Trump could opt for obtaining a bond, but this would necessitate an upfront payment, typically around 10 percent of the total amount, which would not be refunded even in the case of a successful appeal.
Trump’s penchant for legal challenges notwithstanding, New York state authorities possess leverage over the company, with assets such as Trump Tower, 40 Wall Street, and the Trump Park Avenue hotel potentially subject to seizure if the terms of the agreement are not upheld. The estimated worth of Trump’s New York real estate assets stands at approximately $690 million, according to Forbes.
New York Attorney General Letitia James has underscored the alleged misconduct perpetrated by Trump and his sons within the business, characterizing the ruling as a moment of accountability for their actions. Despite his continued unpopularity in his hometown, Trump’s assets in Florida, including the Mar-a-Lago club and the Trump National Doral resort, remain a significant aspect of his portfolio. However, any attempt to shift the company’s headquarters to Florida would require qualification to conduct business in New York.
The three-year ban on serving as an officer, extended to Trump’s sons Eric and Donald Jr. for two years, poses further challenges, limiting their ability to pursue acquisitions, secure loans, or refinance. According to Quinn, while ownership itself is not prohibited, conducting business becomes substantially more complicated following a legal judgment in a jurisdiction. Moving forward, the court will oversee the operations of the business through the appointed independent monitor, thereby diminishing the influence of the Trump family over its affairs.
About The Author
