A New York judge’s order dissolving some companies owned by Donald Trump was temporarily delayed after an appeals court allowed the former president to challenge the ruling as his civil fraud trial continues in Manhattan.
(Bloomberg) — A New York judge’s order dissolving some companies owned by Donald Trump was temporarily delayed after an appeals court allowed the former president to challenge the ruling as his civil fraud trial continues in Manhattan.
The decision Friday by a state appeals court is a preliminary win for Trump as he fights allegations by New York Attorney General Letitia James that he inflated his assets by billions of dollars a year to dupe banks and insurers.
Appellate judge Peter Moulton rejected Trump’s request to immediately halt the trial, which is entering its second week. But he agreed to suspend dissolution of the business certificates for the Trump limited liability companies that was ordered before the trial started. Chris Kise, a lawyer for Trump, argued the dissolution could harm as many as 1,000 employees who work for the LLCs.
The trial judge, State Supreme Court Justice Arthur Engoron, last week found Trump had committed fraud by inflating the value of many of his assets and authorized the cancellation of certificates for companies that hold those assets.
Long Trial Ahead
Trump is accused of corrupting his relationship with banks and insurers for more than a decade by giving them false financial statements on properties from Trump Tower in Manhattan to the Mar-a-Lago estate in Florida. As penalties, James is seeking a quarter of a billion dollars and to bar Trump and his eldest sons from serving as an officer of any New York company.
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Engoron is scheduled to hear evidence for almost three months. Trump, who is juggling five other civil and criminal trials as he campaigns to return to the White House, is planning to testify. His sons Donald Trump Jr. and Eric Trump, who are also defendants in the case, are due to testify too.
The trial may also shed light on Trump’s fraught relationship with his bankers. Six current and former employees of Deutsche Bank AG, one of Trump’s biggest lenders before it cut ties after the January 2021 insurrection at the US Capitol, are on the state’s witness list. The suit doesn’t allege that the banks lost money by working with Trump, but the state does argue the institutions were put at risk because they made lending decisions based on falsified information.
On Friday Kise said the defense was “very pleased” with the appellate court’s decision, adding that the trial court’s “attempt to reach issues, entities and assets beyond the scope of this case has been suspended.”
James said the decision was a rebuff to Trump.
“Once again, Donald Trump’s attempts to delay this trial have been rejected,” she said in a statement, adding that the former president “lives in a fantasy world where money grows on trees and facts don’t matter.”
Earlier, Judy Vale, deputy solicitor general for the state, disputed Kise’s claims that Engoron’s ruling would have a fatal impact on Trump’s businesses.
“No one thinks the lights are going to go off at 40 Wall Street tomorrow,” Vale said. “That is not what’s happening.”
In a letter to the appeals court early Friday, James’s office said it was willing to work out an agreement with Trump’s lawyers on how to proceed with the dissolution.
The dissolution process had not begun, and the attorney general had earlier said it was open to a delay. Both sides are still expected to propose the names of possible receivers for the LLCs in the coming weeks.
The case is New York v. Trump, 452564/2022, New York State Supreme Court (Manhattan).
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(Updates with context about dissolution process in final paragraph.)
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