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The bond issued by Knight Specialty Insurance Co is meant to
secure Trump's compliance with a $454.2 million judgment won by
state Attorney General Letitia James if he does not succeed in
an appeal.
Justice Arthur Engoron imposed the penalty after finding that
Trump, the Republican presidential candidate, fraudulently
inflated his net worth and real estate assets to deceive banks
and insurers into providing better terms.
James, a Democrat, challenged the bond this month, saying Knight
lacked a "certificate of qualification." The state attorney
general filed court papers on Friday questioning whether the
bond is backed by secure assets.
Knight is owned by billionaire Trump supporter Don Hankey.
Engoron will consider James' objection at a civil court hearing
in Manhattan, at the same time jurors down the street are
expected to hear opening arguments in Trump's criminal hush
money trial.
Knight has said it was authorized to issue the bond, which is
fully backed by cash held in a Charles Schwab account pledged to
the insurer, and that it could access nearly $2.2 billion of
assets at its parent company if something went wrong.
James said in court papers that a Trump-owned trust still
controls the account, and that Knight's own financial
arrangements appear insufficient to cover the amount of the
bond.
Hankey previously said in an interview that he charged Trump a
low fee as he did not anticipate problems.
"We thought it would be an easy procedure that wouldn't involve
other legal problems and it's not turning out that way," he
said. "We probably didn't charge enough."
Hankey made his fortune in subprime car loans, with some
regulators criticizing his companies' debt collection tactics.
He is worth $7.4 billion, according to Forbes magazine.
Trump was originally required to obtain a guarantee for the
entire verdict while he appeals, but a state appeals court let
him post a smaller bond.
(Reporting by Jody Godoy in New York; Editing by Nick Zieminski
and Bill Berkrot)
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