Trump's business empire will face a series of difficulties as it faces large fines and closer scrutiny following a New York court ruling.
Former US President Donald Trump lost a civil trial in New York on February 16, when Judge Arthur Engoron ruled that he was liable for violating state law and fined him nearly $355 million plus interest. In total, Trump is expected to pay more than $450 million in fines.
Former President Donald Trump at a campaign event in Rochester, New Hampshire, on January 21. Photo: AP
Judge Engoron didn’t stop there. He also banned the former president from leading any company in New York for three years. In doing so, the New York judge granted a request from Attorney General Letitia James, who sued Trump, accusing the former president of illegally inflating his assets and manipulating their value to obtain favorable bank loans or insurance terms.
Mr. Trump has said he will appeal, and the legal battle could take months or even years to resolve. But Judge Engoron’s decision could cause immediate damage, threatening the former president’s financial health and influence over the Trump Organization, his vast business empire.
The Trump Organization is not required to dissolve or face bankruptcy, but the New York judge's ruling could destroy Trump's billionaire image, observers say.
The ruling also has lasting implications by requiring independent oversight of the Trump Organization's business operations.
“The business is still family-owned in many respects, but it is now out of the Trump family’s control,” Will Thomas, a business law professor at the University of Michigan, said of the New York court’s latest decision.
Legal experts say they see no viable way for the former president to avoid the $355 million fine, which he would essentially have to pay immediately.
While Trump is known for pushing legal challenges to the limit, New York authorities have a lot of leverage over his business empire.
The Trump Organization owns several valuable properties in the state, including Trump Tower, the Trump building at 40 Wall Street and the Trump Park Avenue hotel. Thomas said New York officials could seize those properties if he fails to comply with the order.
Trump Tower in New York City, New York State. Photo: Reuters .
According to Forbes , Trump's New York real estate holdings are worth an estimated $690 million. Forbes estimates the former president's net worth at $2.6 billion, including $870 million from his golf clubs and resorts, $190 million from real estate outside New York, and $640 million from "cash and personal assets."
The former president remains unpopular in New York, having lost the state heavily in both 2016 and 2020. Trump is more popular in Florida, where he owns Mar-a-Lago, the Trump National Doral resort in Miami, and three homes. But even if he wanted to move the Trump Organization headquarters to Florida, he would still need to qualify to do business in New York, said Brian Quinn, a professor at Boston University Law School.
Furthermore, a three-year ban on doing business in New York for Trump and a two-year ban on his sons, Eric and Donald Jr., means they will not be able to make acquisitions, take on debt or refinance.
“Business has become very difficult,” Quinn said.
Thomas said it would be much harder to move a business to a new state once a judgment was entered against it. The next phase would be for the courts to determine exactly how the business is run with an independent oversight body, not the Trump family, he noted.
“The New York assets are the most heavily controlled by the court,” Thomas said. “But the rest of the Trump Organization will also have a hard time escaping the restrictions of this ruling.”
Vu Hoang (According to AFP, Reuters, AP )
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