(LibertySociety.com) – New York Attorney General Letitia James’s bubble was busted yet again after asking Judge Arthur Engoron to void the $175 million bond posted by former President Trump. James argued in the filing that the bond company, Knight Specialty Insurance Company (KSIC), did not have the authorization to do business in the state because it was not regulated by New York’s insurance department.
During a recess in the April 22 hearing, lawyers for Trump and New York secured a deal that made the posted bond acceptable to both side. Judge Engoron approved the agreement.
James had said that the company only had a $138 million policyholder surplus and had never written a surety bond in the state, or anywhere else for the last two years. New York state law prohibits small businesses like KSIC from taking on liabilities that are more than 10 percent of the company’s surplus. The filing said that KSIC would only be allowed to write a $13.8 million bond in the state.
James also claimed in the filing that some of the company’s management had previously violated federal law by operating “affiliated companies within KSIC’s holding company structure.” She wrote that the company had not been given the “exclusive right to control the account” and could not gain exclusive control without giving a 48-hour notice. She went further, arguing that the company transfers its risks to the Cayman Islands to artificially increase its total surplus and reduce its liabilities. She asked the judge to rule that Trump post a replacement bond within seven days of his decision.
A hearing over James’s filing took place on April 22. The Associated Press reported that the state’s lawyers and former President Trump’s attorneys settled the matter while the court was in recess. KSIC and Trump’s lawyer decided to keep the $175 million in a low-risk, interest-gaining cash account. It has already earned $700,000 in interest, according to the AP. KSIC will also maintain control of the money. Trump spoke to the media ahead of opening statements for his hush money trial in New York, blasting James for challenging the bond because he put up the collateral.
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