Letitia James Asks Judge To Reject Trump’s $175 Million Bond
New York Attorney General Letitia James has asked a judge to void the $175 million bond former President Donald Trump posted to appeal his New York civil lawsuit. In a 26-page memorandum of opposition obtained by Fox News Digital, James questioned the insurance company, California-based Knight Specialty Insurance Company’s ability to back Trump’s bond.
New York Attorney General Letitia James opposes company holding Trump's $175 million bond in civil fraud case https://t.co/YQxSgXNkvg pic.twitter.com/zytDi5hf9i
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James wants the Court to deny KSIC’s motion to write Trump’s bond and require him to come up with a replacement undertaking in seven days of the ruling.
According to James, KSIC does not have authorization to do business in New York as it is a small insurer which is not regulated by the state’s insurance department. She stated that KSIC has never written a surety bond in New York before Trump and has never written a surety bond in any other jurisdiction in the past two years.
She also pointed out how the department has a total policyholder surplus of just $138 million. New York state law does not permit smaller businesses like KSIC to expose themselves to liabilities like bonds, or any potential loss bigger than 10% of their surplus.
As James’ filing pointed out, “Based on KSIC’s policyholder surplus in its most recent annual financial statement of $138,441,671, the limitation of loss on any one risk that KSIC is permitted to write is $13.8 million. The face amount of the bond exceeds this limitation by $161.2 million.”
According to James, “KSIC is not qualified to act as the surety under this standard because its management has been found by federal authorities to have operated affiliated companies within KSIC’s holding company structure in violation of federal law on multiple occasions within the past several years.”
“KSIC does not now have an exclusive right to control the account and will not obtain such control unless and until it exercises a right to do so on two days’ notice,” she noted in the filing.
The attorney general also stood against the financial summary KSIC attached to the bond as evidence of its capacity to write the $175 million bond.
“That is because KSIC sends 100% of its retained insurance risk to affiliates in the Cayman Islands, where lax regulations allow KSIC to use this risk transfer to reduce the liabilities it carries on its books in a way that artificially bolsters its surplus, a practice New York regulators have dubbed “shadow insurance” and about which they have sounded the alarm,” the filing added.
The court will be holding a hearing on James’ filing on Monday, according to CBS News.
