I posted yesterday about issues with the bond in the NY fraud case. Trump needs to post a bond to keep Leticia James from enforcing the judgment which could lead to her beginning to seize his assets. I learned a lot more about what's going on.

First let's look at Trump's other bond. He had to post a bond in the E. Jean Carroll case. In that case Trump went to Chubb insurance, a known surety bond provider and worldwide issue group. And there's been no issues with it. It was formally approved by the court yesterday.

This new bond has a ton of issues and first I thought they were just paperwork stuff, but they seem much deeper.

So SUREty bonds and inSURance have something in common, making sure someone gets paid. The company putting up the bond is making a guarantee. They do not transfer money up front. I had thought that money is put into an escrow account, but that is not what happens. A bond is just a legal document saying you are responsible for paying. This is why insurance companies like Chubb are involved in surety bonds, they as a company are regulated to ensure they can pay out what they say they can out.

Let's say they put up a million dollar bond in 15 different cases, they need prove they have a surplus that let's them cover all the different cases. They can't pledge the same million dollars 15 times.

So that's the backstory to the screwy stuff that is going on.

So the company is that posting the bond for Trump called Knight Specialty Insurance when they filed they paperwork it got rejected for correction.....not by the Engoron or Leticia James, but at the clerk level

Screwy stuff

1. Nobody signed the document (no lawyer in fact)
2. No power of attorney was given (showing someone at the company agreed to pay)
3. The required financial statement was missing (nothing to show they had $175 million they could guarantee)

So they went back and fixed 1, 2 and 3 and refiled. You can see their financials here https://eddsa.blob.core.usgovcloudapi.net/public/452564_2022_PEOPLE_OF_THE_STATE_OF_v_PEOPLE_OF_THE_STATE_OF_BOND_UNDERTAKING_1707.pdf

But this revealed more screwy stuff

4. Page 2. Knight Specialty Insurance Company is the company providing the guarantee for $175 million

They said they meet the requirements to "transact business and issue this undertaking in NY." (This part of the process is called the the undertaking.)

5. Page 7 Knight Specialty Insurance Company doesn't seem to have $175 million.

They include their financial statement. They have 539 million in assets and 400 million in liabilities.

This means they have about $139 million in surplus not enough to cover the 175 million.

6. Page 8 includes another financial statement. There's a billion dollar surplus here.

But it's a different company. It's Knight Insurance Company LTD. If this company can cover the $175 million why didn't they just list this company as the bond provider.

7. Knight Specialty Insurance might not be allowed to operate in NY

CBS did a story on this that I pointed to in my old post.

New York Attorney General Letitia James .... "exception to the sufficiency of the surety" given by Trump and the other defendants. She objected to the fact that the bond was issued by a company that is not an admitted carrier in New York, and lacks the certificate of qualification required by New York Insurance Law Section 1111.

They talked to an attorney who has filed these bonds before and he has never seen errors like this before

was struck by "glaring errors" in the bond. "In all the years I've been doing this, you always have to have a certificate from the Department of Financial Services saying that you're licensed to issue a surety bond," he said, referring to the missing certificate of qualification. Lederman also noticed that Knight Specialty is not listed on New York's Department of Financial Services website

8. NY law says you can't pledge more than 10% of your capital in any one case.

A former assistant NY attorney general noted a number of issues with the bond.

"Including that the company doesn't appear to be licensed in New York and doesn't appear to have enough capital to make this undertaking," Pollock said. The company also does not appear to meet a restriction under New York insurance law barring companies from putting more than 10% of its capital at risk.

So now they are going to go back to court on April 22 and Knight Specialty is going to have to prove they can issue this bond.