A New York judge’s ruling that Donald Trump had committed fraud, leaving the fate of his business empire uncertain, was a “devastating” blow to the former president, legal experts said Tuesday night.
If not successfully appealed, the decision will revoke the Trump Organization’s “business certificates” (the corporate licenses held by Trump, his family, the Trump Organization and the LLCs he owns) that prevent the 77-year-old from conducting business in the Empire. State until the revocation is resolved.
The ruling amounts to a “corporate death penalty,” experts told Business Insider.
“It means you are no longer a company, and the judge is appointing someone to take charge of the assets and distribute them as the court sees fit,” former financial crimes prosecutor John Moscow told the outlet.
Manhattan Supreme Court Justice Arthur Engoron ruled that the businessman vastly exaggerated the value of his wealth to secure favorable terms with banks, ultimately leading to global fame…and the White House.
Manhattan Judge Arthur Engoron ruled that Trump committed fraud.Gregory P. Mango
Part of the ruling dictates that a trustee must be appointed to manage the LLC closing process.
Recommendations for the position must be submitted to the judge within 10 days.
“Today’s decision is a final decision that fraud is proven. The judge made this decision based on Trump’s own documents. The evidence is Trump’s own documentation,” Andrew P. Napolitano, a former New Jersey Superior Court judge, told The Post.
“These are indisputable facts: the case is based entirely on the documents presented by his lenders and his insurance companies.”
Another former Manhattan financial crimes prosecutor, Diana Florence, told Insider that while Trump will still own his properties, the ruling changes what he can do with them, sort of like owning a car but having his driver’s license revoked. .
Donald Trump was stripped of his authority to execute strategic and financial decisions for his New York businesses.REUTERS
He also compared it to when someone dies but an executor manages the estate of the deceased person’s assets.
“Without a corporate charter, you can’t operate as a corporation,” Florence told the outlet. “You can’t get loans, you can’t apply for a government contract.”
The 2024 GOP presidential front-runner will likely appeal the ruling, which could cost him more than $250 million in fines that New York State Attorney General Letitia James is seeking — a big boost for the Republican, which has less liquidity.
The sentences will be determined in a trial that will begin on October 3.
Trump may have to sell assets to pay high legal fees, a source familiar with the former president said.Getty Images
In theory, the trustee could continue to handle things like collecting rent, paying taxes, bills and salaries until the business assets are sold.
While Trump would be entitled to those assets, they would first go toward paying off his debts, including any damages he may owe after the trial, Florence said.
“The receiver will be in charge and responsible to the court. “Trump can’t tell the recipient what to do,” he said, adding that the entire process could take years to resolve.
Trump may have to sell his assets to pay high legal fees, which could hurt his ego more than his pockets, a source familiar with the former president said.
“It’s really screwed up,” said the source, who asked to remain anonymous.
“This really hurts. He cares about money. This is the beginning of the end for him. These cases are going to hurt you a lot. He has been very nonchalant about this.”
It is not immediately clear whether the certificate revocation will stand as the appeal case moves through the circuit, which could take months.
However, there is little to stop Trump from ignoring the ruling: In the meantime, he would receive monetary fines for conducting business, but would not see any criminal ramifications.
“A normal person would be very concerned about what happened today and would probably start looking for new shareholders or sell or consider perhaps transferring certain real estate assets to several different entities. I don’t think he’s going to do any of that,” said Alex Fisher, a corporate attorney at Fisher and Fisher.
There is little to stop Trump from ignoring the ruling’s guidelines, although he will face monetary fines for conducting business in the meantime. AP If not successfully appealed, the decision will revoke the Trump Organization’s business certificates. Getty Images Judge Engoron ruled that Trump grossly exaggerated the value of his wealth to obtain favorable terms from banks.REUTERS
“And given this person’s propensity to challenge civil rulings or civil outcomes in practice, it may not have as big an effect as someone believes.”
If the decision is upheld after the appeals process runs its course, Trump will lose an important way to make money.
“It’s a devastating ruling,” said Bill Black, distinguished resident scholar in financial regulation at the University of Minnesota Law School.
“If the decision is confirmed, they will have to liquidate the LLCs that actually own the enormous mass of assets.”
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Source: vtt.edu.vn