According to the billionaire responsible for the surety company that provided Donald Trump’s civil fraud bond, the insurers may have underestimated the cost of covering the pledge.
Former President Trump appealed a ruling by New York State Supreme Court Justice Arthur Engoron, who found him and others affiliated with The Trump Organization liable for misleading insurers and lenders. As part of the appeal, Trump posted a $175 million bond on Monday to secure his financial obligations.
The court’s filing system rejected the bond later that day because the necessary paperwork, including a “current financial statement,” was missing. New York Attorney General Letitia James later raised concerns about the adequacy of the bond.
In an interview published on Friday, Don Hankey, chairman of the Hankey Group and owner of Knight Specialty Insurance Company, revealed that his firm charged former President Trump a reduced fee for posting the $175 million bond. Hankey did not disclose the exact amount but mentioned that Knight opted for a lower fee due to their assessment of minimal risk associated with the bond.
Hankey expressed his surprise at the unexpected complications that have arisen during the supposedly straightforward procedure. He also acknowledged that their initial pricing may not have been sufficient for the additional legal complexities that have emerged.
Insureon, an online agency specializing in small-business insurance, states that the fee for a surety bond can vary between 1 percent and 15 percent of the total bond amount.
Trump’s attorney, Alina Habba, was contacted via email by Newsweek for comment on Friday afternoon.
During the interview, Hankey mentioned that his company has received numerous emails and phone calls after supporting Trump’s bond. He also suggested that this may have contributed to the former president’s difficulties with other insurance companies. Trump’s legal team had appealed to a New York appeals court to reduce the bond amount from the initial $454 million, arguing that it was practically impossible to fulfill the penalty.
According to Hankey, he expressed his surprise and disbelief at James questioning the bond. He mentioned that he was taken aback by the fact that they were being more stringent with their scrutiny of the bond, and seemed to be actively searching for reasons to create problems with their instrument.
In a recent court filing, James’ office has requested Trump and the Knight company to provide justification for the bond. This could potentially require the disclosure of more information regarding the collateral that the former president offered in exchange for Knight’s support.
The court had scheduled a hearing on April 22 to discuss the specifics of the bond.
