New York Court: Trump Engaged in Fraud, Receivership Ordered for Trump Companies

As if Donald Trump did not already have enough legal problems given his 91 criminal indictments in four pending cases, a New York court has entered a ruling that threatens Trump's false persona as a successful business man and could destroy his real estate holdings in New York.  The ruling held that Trump, his sons and others in the Trump Organization had committed business fraud for a decade and falsified property values when securing loans or stating Trump's net worth (some believe his real net worth is vastly lower than what Trump claims).  In essence, the ruling confirms that Trump has been a con man for years and not the savvy businessman he claims to be.  Even more threatening, the court terminated the legal existence of a number of Trump limited liability companies and has called for a receiver to be appointed to liquidate their assets. Both the New York Times and the Washington Post look at the ruling and its potential impact on Trump. While not mentioned in the articles, the termination of the legal existence of Trump's companies could well trigger defaults under his loans made to the companies.  Trump's attorneys - a number of whom were sanctioned by the court - say Trump will appeal.  First these highlights from the Times piece:

Nearly every aspect of Donald J. Trump’s life and career has been under scrutiny from the justice system over the past several years, leaving him under criminal indictment in four jurisdictions and being held to account in a civil case for what a jury found to be sexual abuse that he committed decades ago.

But a ruling on Tuesday by a New York State judge that Mr. Trump had committed fraud by inflating the value of his real estate holdings went to the heart of the identity that made him a national figure and launched his political career.

By effectively branding him a cheat, the decision in the civil proceeding by Justice Arthur F. Engoron undermined Mr. Trump’s relentlessly promoted narrative of himself as a master of the business world, the persona that he used to enmesh himself in the fabric of popular culture and that eventually give him the stature and resources to reach the White House. . . . his finding imperils both Mr. Trump’s public image and his business empire. The former president now faces not only the prospect of having to pay $250 million in damages, but he could also lose properties like Trump Tower that are inextricably linked to his brand.

Mr. Trump’s lawyer in the case, Christopher M. Kise, called the ruling “outrageous” and said the decision would be appealed.

In all of Mr. Trump’s recent legal travails, his typical tactics for self-preservation have largely failed him. When cornered, Mr. Trump has traditionally sought to bluster his way out of trouble, falling back on exaggerations or outright lies to escape.

These methods have served him well in the business and political arenas, where there is often little price to pay for bending the truth and where voters tend not to distinguish between gradations of prevarications. Those methods, though, have been much less effective so far in the courts, which operate according to strict standards of veracity and staid and sober rules.

In straightforward terms, Justice Engoron punctured Mr. Trump’s bubble of protective falsehoods about the way he conducted his business.

Mr. Trump’s other weapon of choice — bullying his adversaries — has not fared much better in the courts. This month, federal prosecutors asked the judge overseeing his federal election interference case to impose a gag order on him, citing his “near daily” social media attacks on people involved in the proceeding and the threats they were generating.

Mr. Trump blew past an early warning from the judge in that case, Tanya S. Chutkan, to be mindful about what he said concerning the witnesses, prosecutors and potential jurors in the case. But if he thought he could simply muscle through the judge’s admonition, prosecutors called his bluff. Now Mr. Trump has placed himself on what could be a collision course with the judge that could result in his public statements being curbed in the middle of his presidential campaign.

Justice Engoron’s decision hinted at a trait that has longed defined Mr. Trump’s personality and approach to doing business. He has always sought to create his own reality, often getting away with it — up to a point.

The truly fun stuff that threatens Trump assets is covered by the piece in the Post.  Here are the most delicious highlights:

The judge’s ruling represents a significant setback for Trump by revoking his company’s authority to do business in New York, where the Trump Organization is headquartered and where Trump has major real estate interests. It also represents a victory for Attorney General Letitia James (D), who had asked that Engoron simplify the upcoming trial by deciding in advance that fraud was broadly committed so the state would need to prove only specific illegal acts.

The decision orders the parties to suggest candidates for receivers who will oversee the dissolution of the various entities that make up the Trump Organization’s corporate structure — a ruling that appears to mean the collapse of its operations in New York.

James filed a lawsuit against Trump and his company last year alleging that the Trump Organization and its executives defrauded lenders and insurance companies from 2011 to 2021 by inflating Trump’s net worth in business transactions.

By manipulating the value of Trump’s property and other real estate assets by up to $2.2 billion annually, the real estate, hospitality and golf resort company obtained better interest and policy rates than it otherwise would have, according to the lawsuit.

Trump is expected to stand trial along with his sons Donald Trump Jr. and Eric Trump, who served as executives, longtime finance chief Allen Weisselberg and long-serving comptroller Jeffrey McConney.