What the judge left unclear is what he meant by “dissolution,” whether that referred to the liquidation of entities that control properties or the properties themselves. He said Trump should then be stripped of control over those companies, which are the official owners of his Fifth Avenue headquarters and other marquee properties, and have them turned over to a receiver who will manage the “dissolution” of them. In an order last September that’s currently under appeal, State Supreme Court Judge Arthur Engoron said Trump had indeed committed fraud and should have the state certificates needed to run many of his New York companies revoked. Trump, the Republican presidential frontrunner, has focused his ire at potentially losing his business at both the Democratic New York attorney general who brought the case and the judge presiding over it. “This sets a horrible precedent,” said Adam Leitman Bailey, a New York real estate lawyer who once successfully sued a Trump condo building for misrepresenting sales to lure buyers.Īdded University of Michigan law professor William Thomas, “Who suffered here? We haven’t seen a long list of victims.” Bank officials called to testify couldn’t say for sure if Trump’s personal statement of worth had any impact on the rates. The bank never complained, and it’s unclear how much it lost, if anything. Customers had lost money or bought defective products or never received services ordered, leaving them cheated and angry.Īnd though the bank offered Trump lower interest rates because he had agreed to personally guarantee the loans with his own money, it’s not clear how much better the rates were because of the inflated figures. “Is he getting his just desserts because of the fraud, or because people don’t like him?”ĪP’s review of nearly 150 reported cases since New York’s “repeated fraud” statute was passed in 1956 showed that nearly every previous time a company was taken away, victims and losses were key factors. “This is a basically a death penalty for a business,” said Columbia University law professor Eric Talley. And some legal experts worry that if the judge goes out of his way to punish the former president with that worst-case scenario, it could make it easier for courts to wipe out companies in the future. Lawyers for the state in Trump’s monthslong civil trial have argued that the principles of fair play in business alone are enough to justify a harsh penalty, but even they aren’t calling for the prospect of liquidation of his businesses and properties raised by a judge. NEW YORK - Within days, Donald Trump could potentially have his sprawling real estate business empire ordered “dissolved” for repeated misrepresentations on financial statements to lenders, adding him to a short list of scam marketers, con artists and others who have been hit with the ultimate punishment for violating New York’s powerful anti-fraud law.Īn Associated Press analysis of nearly 70 years of civil cases under the law showed that such a penalty has only been imposed a dozen previous times, and Trump’s case stands apart in a significant way: It’s the only big business found that was threatened with a shutdown without a showing of obvious victims and major losses.
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