Donald Trump has vowed to fight the $83.3 million defamation penalty that a federal jury awarded E. Jean Carroll — but he will need to hand that money over to the court as he pursues an appeal.
Unless Trump happens to have that much cash lying around — and few people, even the really wealthy, tend to have that much capital on hand — he will need to secure an appeal bond, an arcane type of insurance product that will require some seriously high-value collateral, experts say.
In this case, Trump cannot just walk across the street from the courthouse to a bail bondsman’s office, but will need to enlist the help of a surety-bond agent to secure a guarantee that Carroll will get her money should he lose on appeal.
“These bonds are required whenever there is an adverse judgment that a plaintiff intends to appeal,” said Mark Levinson, senior vice president of the Brunswick Companies, a surety-bond specialist in Cleveland, Ohio. “The purpose is to protect the plaintiff and limit the possibility of frivolous appeals.”
The bond is typically underwritten by an insurance company — in this case, given the size of the award, it will probably have to be one of the top 20 in the country, Levinson said. That policy would likely be reinsured through other insurance carriers, he added.
The insurance companies and the surety agents will require Trump to put up collateral equal in value to the size of the bond — whether that be cash assets, a piece of property or an irrevocable line of credit issued by a financial institution.
Some legal experts have raised questions about Trump’s ability to secure such a bond, but Levinson said he’d be surprised if Trump wasn’t able to get a bank to give him a line of credit or come up with sufficient assets as collateral.
A message left with Trump’s legal team in the Carroll case wasn’t immediately returned.
To secure a bond, Trump will be required to produce voluminous financial records to verify the value of any property he offers as collateral, Levinson said. But the process will be simpler if Trump secures a credit line from a bank with whom he already has a relationship.
One thing the underwriters will take into consideration is any other litigation the client faces and the possibility of other payouts being required, which in Trump’s case is high.
He has already had to put up $5 million in cash while appealing a separate civil suit in New York state court, in which he was found liable for sexually abusing Carroll and defaming her. On Friday, a federal jury found the former president liable for making disparaging remarks against Carroll after she wrote an article saying he had raped her in a dressing room at a New York City department store in the 1980s, and awarded her $83.3 million.
Trump has denied ever sexually assaulting Carroll, saying “she is not my type.”
Trump also is awaiting the verdict in a civil case brought by the New York state attorney general, who is seeking $370 million in damages and a lifetime ban against Trump working in New York over allegations he illegally inflated the value of his assets while seeking insurance and deflated them when paying taxes.
Trump has denied the charges and says the case is politically motivated.
He also faces several criminal cases on charges of racketeering, election tampering, fomenting an insurrection, improperly withholding classified documents and violating campaign finance laws by making hush money payments to women who claimed to have had affairs with him.
Trump has denied the charges in all cases.
For the appeal bond in the Carroll case, Trump will likely have to pay between 1% and 3% of the total of the bond annually depending on the strength of his finances and the assets he pledges — so between $833,000 and $2.5 million every year the appeal goes on, Levinson said.
But the bond only serves as a place saver of sorts. If in the end Trump loses, he will have to pay Carroll the award out of his own pocket. Levinson says the likelihood of Trump having to pay is high.
“We write these policies with the understanding that you are likely to lose,” Levinson said. “While the amount may end up being lowered, some 90% of all appeals fail.”