Donald Trump, before winning the presidency in 2016, was known as one of the most important businessmen in the real estate world in the United States and especially in New York. However, today his assets are at risk, with a series of legal sieges that threaten to leave the former president without liquid capital. Trump's finances have never been more vulnerable than they are today.
In particular, two court rulings in recent weeks have cornered Trump. One was the defamation lawsuit by writer and journalist E. Jean Carroll, in which the former president was ordered to pay her $83.3 million. In a case in New York, where District Attorney Letitia James accused the former president of fraud and conspiracy, Judge Arthur Engoron ordered Trump to pay an astronomical fine of $450 million. This number increases by $87,000 each day he does not pay due to interest. Trump, of course, appealed both rulings and hopes to be able to negotiate, at least, the New York case.
In the eyes of Trump's defense, the sentence imposed by Judge Engoron is not only excessive, but is intended to break the former president.
Christopher M. Kise, one of Trump's lawyers, told The New York Times that the fine is "draconian and unconstitutional" and "will cause irreparable damage to both the business community and the rule of law in our country."
Renowned lawyer and academic Alan Dershowitz, who was part of Trump's defense team on several occasions, called the fine of more than $450 million "excessive" in a column for Voz Media. He claims it goes against the Eighth Amendment, which states, "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."
"The fine is clearly excessive by any reasonable standard. It does not reflect actual damages inflicted on others by Trump's alleged overstatement of the value of his assets," Dershowitz wrote.
New York District Attorney Letitia James accused Trump of inflating his assets in New York to obtain tax benefits and manipulate the market in his favor when she began investigating him in March 2019.
An uncertain fortune
One of the mysteries behind the former president's fortune is how much he really has. Trump has said on several occasions that he is very rich and that his total assets are valued around "$8 billion or $9 billion."
In July 2015, just after announcing his first run for president, Donald Trump's campaign claimed that his total assets were valued around $10 billion.
A few years later, in 2022, as part of James' investigations, Trump claimed that his fortune was worth $8 billion.
However, there is no rounded and certified number. The media and other specialized independent organizations have estimated a much lower figure than that boasted by Donald Trump. According to Bloomberg's Billionaires Index, by 2018, Trump's total net worth was $2.48 billion.
The same ranking explained how Trump's assets have decreased from $3 billion in 2016 to $2.45 billion in 2021. The numbers provided by Forbes are similar.
In 2015, when the former president said "I'm really rich!" based on an estimated net worth of almost $9 billion, Forbes magazine claimed that what Trump said was "a whopper," and calculated the former president's net worth at $4.1 billion.
"Since 1982, Forbes has been tracking Trump’s net worth in great detail. That’s more than thirty years. Over those decades, we have worked both with him and outside experts who can help us come up with a fair market valuation of his assets. Every year, Trump shares a lot of information with us that helps us get to the figures we publish. But he also consistently pushes for a higher net worth—especially when it comes to the value of his personal brand," according to the article published by Forbes.
"There is no doubt that Trump is a billionaire and a savvy deal-maker. He turned his father's construction company into the massive empire it is today. He is also a survivor: having gone through a corporate bankruptcy," says Forbes, which clarifies why there is such a big difference between Trump's numbers and their own estimates: "Trump claims that his brand and brand-related deals are worth some $3.3 billion. We value his brand at just $125 million."
Trump's assets have taken a dive since he became involved in politics in 2015, Forbes reveals. According to the magazine, the former president's fortune has decreased by 31%, and by 2019, his assets were valued at $3.1 billion.
By 2020, Forbes estimated the former president's wealth at $2.6 billion. That year, he was left off, for the first time, the annual list of the 400 richest people in the United States.
According to Forbes, Trump's net worth was estimated at $2.6 billion in March of this year, making Trump the 1,217th richest person in the world. Bloomberg agrees with the estimate.
Cashless and isolated
The problem that Trump faces today is that, no matter the value of his assets, is that he has a period of just days to pay an enormous amount of money that, apparently, he does not have.
In April 2023, during a deposition for the New York case, Trump said: "We have a lot of cash. I believe we substantially in excess of $400 million, which is a lot for a developer. Developers usually don't have cash. They have assets, not cash. We have, I believe, $400 [million] plus and going up very substantially every month."
Although he made it sound like a lot of money, today, even if he still has the same amount, it would not be enough to pay the fines for the two legal cases. Trump needs more than $540 million to pay off the fines and, apparently, he does not have it.
In February of this year, after hearing Judge Engoron's ruling in the New York case, Trump appealed to the court and asked that the fine be reduced from more than $400 million to $100 million. Otherwise, he argued, he would have to sell several properties. The court rejected the proposal.
In these cases, normally if the person who must pay the fine is a millionaire and has considerable assets, they can ask a bonding company for help. If this occurs, the company responds to the court and offers a guarantee that the accused can and will pay the fine.
But it seems that Trump has not found anyone to assist him in this case. Journalist David Graham wrote in The Atlantic that "bonding companies might hesitate to work with Trump for various reasons. The size of the bond required is substantial." Additionally, Graham says, Trump has a bad reputation with lenders; and the possibility of the former president returning to the White House does not generate confidence, because he could take advantage of the role to defer payment.
In addition to the fine, Judge Engoron prohibited Trump from requesting loans from banks in New York. It is known that many important banking entities that Trump has worked with in the past have ended their relationships with the former presidents due to the controversies that surround him.
The ruling, however, allows the former president to seek loans from banks outside the state or the country, but the case in New York makes it clear that Trump has exhausted virtually any lending alternative. He had just Deutsche Bank left, which is known for a certain laxity and for its years-long relationship with Trump.
"For the past 10 years, Deutsche Bank has been Donald Trump's banking bestie, loaning him more than $400 million as he developed a Miami golf resort, a tower in Chicago, and a luxury hotel in the heart of Washington, DC." reads Business Insider.
In an article titled "The Money Behind Trump's Money" in The New York Times, journalist David Enrich explains the former president's relationship with Deutsche Bank in detail and how it has always been his trump card, pun intended. However, thanks to Letitia James's accusation, it was discovered that the bank ended its ties with in 2020.
"When Deutsche Bank learned in 2020 of OAG's [Office of the Attorney General] allegations ... it asked the Trump Organization to answer a series of questions about those Statements. The Trump Organization refused to respond. As a result, Deutsche Bank decided ... to exit its relationship with the company," reads one of the case documents, published in October 2022.
Without the bank that always assisted him willingly and without a bonding company to support him, Trump is running out of options to finance the payment of the fines. The possibility that Trump will have to sell some of his valuable assets in order to obtain cash remains on the table, which would be a brutal blow to the former president's epic as a real estate magnate.
Although Trump will probably not declare bankruptcy, Engoron's fine, which prevents the former president from doing business in his hometown, New York, on top of the sale of some very important properties will undoubtedly diminish the real estate empire that Trump spent decades building.
Michael Cohen, who was Trump's lawyer and a key member of the Trump Organization, believes that the former president is going to end up selling some properties. "They’re going to have to start liquidating assets," Cohen said in an interview with MSNBC. "He doesn’t have 400 million of cash on hand," added Cohen, who fell out with the former president several years ago.
Selling properties, however, will not happen overnight. In The Atlantic, Graham writes that "This is a terrible time to be selling commercial real estate. Office rents in New York have tanked and everyone would know that Trump is a motivated seller, so no matter what values Trump claimed his properties were worth, he’d likely have to accept bargain prices."
Graham recalls that Trump could declare bankruptcy, but he rules it out because this, on the eve of elections, it would be a shameful recognition of failure that neutralizes the former president's own personality and spirit.
Finally, if the former president's appeals fail and he is unable to pay the fine, then Attorney General Letitia James could begin seizing property at her discretion. In fact, in her own words, James said: "We are prepared to make sure that the judgment is paid to New Yorkers, and yes, I look at 40 Wall Street each and every day," referring to Trump Tower in Lower Manhattan, one of the jewels and great real estate symbols of the former president's empire.
"In the case of a seizure, sheriffs would take over a building and then auction if off; the proceeds, minus the cost of any liens on the property, would go toward Trump’s debt," The Atlantic article states.
In contrast, as his empire trembles, Trump's race for the presidency remains intact and with strong momentum. Paradoxically, the legal attacks seem to have boosted the popularity of the former president, who has brushed off the cases against him as a witch hunt. While the former president's financial future is uncertain; today, if the polls as true, it seems that his arrival at the White House is not.
In the most recent poll published by The New York Times, the former president not only surpasses Joe Biden; but he has a gap of more than four points. Trend is the same in other polls. Although Letitia James came to office promising to bring Trump to justice, it seems that she will not prevent him from returning to the Oval Office. He may not have the wealth he had before, but he would still have power.
