New York’s Attorney General is against company holding Trump’s $175 million bond in fraud case.

Trump is currently facing setbacks in several legal battles, with New York Attorney General Letitia James taking action against the surety company that holds a $175 million bond for the former President. This bond is related to the $460 million decision against him in a civil fraud trial earlier this year.

The Attorney General’s office is raising concerns about the financial stability of the bondholder, Knight Specialty Insurance company, and the collateral for the bond. The office argues that the $175 million in cash that Trump claims to have provided as collateral is in a trust and not under Knight’s control, which could pose a risk in securing the bond.

If Trump maintains access to the funds, he could potentially make withdrawals or replace the cash with other assets that may fluctuate in value, jeopardizing the security of the bond. Additionally, if the value of the collateral drops below $175 million, the bond would no longer be fully secured.

The state is worried that if Trump retains control over the account, he could potentially profit from the bond deal by earning interest that exceeds the fees owed to Knight for posting the bond. In the event that Trump loses in his appeal and fails to pay, Knight would be responsible for covering the $175 million bond.

However, concerns have been raised about whether Knight meets the necessary requirements as a surety bondholder. Under New York insurance law, companies are prohibited from putting more than 10% of their capital at risk. Knight, with only a surplus of $138 million, may not have the financial capacity to take on liability exceeding $13.8 million as required by law.

The Attorney General’s office also pointed out that Knight’s management practices may be questionable, as they rely on risk transfer techniques that artificially boost their surplus. James further argued that Knight’s management has violated federal laws on multiple occasions in recent years.

Representatives for Trump have not responded to requests for comment on this matter. The state has requested the court to compel Trump to find a replacement for the collateral within seven days of the ruling. A hearing on this issue is scheduled for Monday.

Overall, Trump’s legal troubles seem far from over, as the legal battles with the New York Attorney General’s office and the surety company continue. It remains to be seen how this situation will unfold and what implications it may have for the former President.