Amid a legal battle with the state of New York’s attorney general over allegations of fraud, the corporation owned by former President Donald Trump is appealing a judge’s decision to appoint an independent monitor to oversee its business operations.
On Monday, attorneys for the Trump Organization submitted documents to a state appellate court in Manhattan to contest the ruling that had been handed down by Manhattan Judge Arthur Engoron the previous Thursday. In addition to this, they are requesting a stay to prevent Engoron’s verdict from going into force while the appeal is still underway.
The attorneys for the corporation argued in documents filed with the court that Engoron exceeded his authority when he demanded that an independent watchdog monitor the Trump Organization during the entirety of Attorney General Letitia James’ civil action.
According to the company’s attorneys, the ruling issued by Engoron effectively put the company in a position where it was unable to freely make deals, sell assets, or change its corporate structure. Additionally, the lawyers claimed that the ruling placed an “immediate and unlawful prejudgment restraint” on nearly $5 billion in assets.
James’ office received a note requesting a comment on the matter.
James’ complaint, which was the result of an investigation that lasted for three years, asserts that Trump and the Trump Organization lied to banks and other entities about the worth of coveted assets, such as golf courses and hotels that bore his name.
James, a Democrat, is suing Trump, a Republican, for $250 million and a permanent ban on Trump from conducting business in the state.
After claiming to have found evidence that showed the company was taking steps to avoid potential penalties from the lawsuit, James’ office decided to seek the services of an independent monitor. One of these steps included the incorporation of a new entity with the same name as the company, which was called Trump Organization LLC, in September, just before the lawsuit was filed.
In an 11-page order, Engoron stated that Trump and the Trump Organization “demonstrated a propensity to engage in persistent fraud” and that the appointment of an outside monitor “is the most prudent and narrowly tailored mechanism to ensure there is no further fraud or illegality” pending the resolution of the lawsuit. Engoron also stated that the appointment of an outside monitor “is the most prudent and narrowly tailored mechanism to ensure there is no further fraud or illegality.”
In a statement, Christopher Kise, a lawyer for the Trump Organization, said that the order “grossly expands” the power of New York’s attorney general “to interfere in private commercial transactions” and “imposes vague and onerous obligations” that “will impede the operations of an extraordinarily successful business empire.” Engoron’s order was issued in response to a complaint filed by the Trump Organization.
Engoron placed a ban on the Trump Organization from selling or transferring any noncash assets without first providing a notification to the court and James’ office for fourteen days. The individual who will be selected as the monitor will be responsible for ensuring compliance on the part of the company and will promptly report any violations to the court as well as the attorneys for both sides.
Engoron stated that the Trump Organization is required to provide a complete and accurate description of the company’s structure, as well as grant the monitor access to its financial statements, asset valuations, and other disclosures. Additionally, the Trump Organization is required to provide the monitor with at least a thirty-day advance notice of any potential restructuring, refinancing, or asset sales.
The deadline that Engoron set for the lawyers working for James’ office and the Trump Organization to submit a list of up to three potential monitor candidates is this coming Thursday. After then, according to Engoron, each party will have the opportunity to make comments on the other side’s nominees for five days until he makes his decision.
If the appeal court decides to issue a stay that blocks Engoron’s ruling, then that timing is irrelevant. In that scenario, the Trump Organization would be exempt from having to be monitored if the company’s appeal to the appellate court is either dismissed or the decision that Engoron made is upheld.
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