Trump Is Inching Closer to the Worst Legal Defeat of his Life

Former President Donald Trump has suffered through plenty of painful courtroom defeats during his lengthy career as one of America’s most litigious businessmen.

This time looks different. He’s now officially overdue to receive a downright brutal judicial ruling in a case that threatens to dismember his business empire, drain his cash reserves and drive him out of New York State as a businessman forever. 

Manhattan Supreme Court Justice Aurthur Engoron blew through a self-imposed soft end-of-the-month deadline on Wednesday to deliver a judgment in the sweeping multi-million fraud lawsuit brought by the New York Attorney General Letitia James. Trump and his company have already been found liable, and are now just waiting to find out the size of the punishment. That decision could land at any moment, zapping Trump’s business like a thunderbolt when it does, in what could easily be the largest financial penalty of Trump’s life. 

The New York Attorney General’s Office is seeking $370 million, along with a lifetime ban on Trump working in New York real estate or serving as an executive or director of a company based in the state. Judge Engoron declared Trump and his business liable for fraudulently overstating Trump’s wealth for financial gain in September. Now, the same judge bears sole responsibility for setting the penalty. A spokesperson for the court said Thursday that the ruling has been delayed until early to mid-February.  

A $370 million fine would follow Trump’s $83 million defamation loss to writer E. Jean Carroll, in a lawsuit over Trump’s derisive denials of Carroll’s claim that Trump raped her in a New York department store bathroom in the 1990s. 

Such mammoth judgements dwarf notable courtroom defeats Trump has faced in the past. 

Trump’s company was fined only $1.6 million when it was found criminally liable in late 2022 for paying executives in off-the-books perks in what prosecutors branded an illegal scheme to minimize taxes.

When Trump settled three lawsuits brought against his Trump University real estate training program in November 2016, right after he was elected president, he paid out a total of $25 million. In that instance, the NY Attorney General’s office had accused the operation of fraud, saying the unaccredited, for-profit venture misled its customers by calling the business a “university.” 

The New York AG also had a hand in shutting down the Donald J. Trump Foundation, the personal charity Trump founded in 1987, through a lawsuit that forced the operation to dissolve in 2018. The office accused the charity of engaging in “persistently illegal conduct,” and said Trump used the foundation for his personal and political benefit. Yet when the foundation was shuttered, it was only forced to pay out less than $4 million to eight different charities.

This time, the stakes are much higher. 

The potential combined $450 million in damages from both the New York fraud lawsuit and the Carroll case would equal roughly 15 percent of Trump’s $3.1 billion fortune, as estimated by Bloomberg Billionaires Index. 

Trump himself has boasted that his net worth amounts to some $10 billion or more, but independent experts generally assess his real fortune to be only a fraction of that amount, although still likely in the billions. 

Trump claimed last year that his cash stockpiles are “substantially in excess” of $400 million. He may in fact have $600 million in cash, according to Bloomberg estimates.

Trump’s company is notoriously opaque, meaning that it’s hard to know exactly how much damage losing $450 million would inflict. Most of Trump’s known wealth is held in the form of real estate, including Trump Tower and residential and commercial buildings in Manhattan; golf courses around the country; the Mar-a-Lago estate in Palm Beach, Florida; and his Seven Springs estate in Westchester County, NY. 

Trump has often boasted about the amount of cash he keeps lying around. 

“We have a lot of cash,” Trump said in a deposition with New York attorney general’s office lawyers in April 2023. “I believe we have substantially in excess of $400 million in cash, which is a lot for a developer. Developers usually don’t have cash. They have assets, not cash. We have, I believe, $400-plus [million] and going up very substantially every month.”

Trump won’t have to pay the full amount for either penalty immediately, and hopes to appeal both losses. But the amount will grow while he appeals, rising by 9 percent annually, according to The Wall Street Journal. 

Trump spent approximately $50 million in donor money on legal bills and investigation-related expenses in 2023, The New York Times reported on Wednesday. All told, Trump’s various legal committees spent roughly $210 million in 2023, while raising only $200 million, according to Politico. In other words, Trump’s legal fees are draining resources from his political operation, which spent more last year than it took in despite Trump’s incessant fundraising.  

Then there’s the question of whether, once this case and its appeals are all wrapped up, Trump’s family business will even be allowed to continue to exist in its current state. 

In September, Judge Engoron caused a stir when, upon finding that Trump had committed fraud, he ordered the revocation of many state certificates Trump needs to run his companies. The judge said that the companies, which hold many of Trump’s assets including Trump Tower on Fifth Avenue in Manhattan, should be turned over to a receiver for “dissolution.”

When asked whether he meant that Trump’s buildings should be sold off, Judge Engoron demurred, saying he’d clarify his precise meaning later. That September order is now under appeal. 

Yet so far Trump has lodged several other appeals related to the fraud case, including an attempt to remove James from the case, dismiss the suit completely and block multiple subpoenas. 

Almost all of those efforts have failed.