For whatever else Donald Trump might be, he is and will always be a uniquely New York creation — a being forged at the intersection of Manhattan's cutthroat real estate jungle and heady nightlife scene. As then-CNN reporter Bill Hemmer mused nearly two decades ago, "it's a good bet" that Donald Trump and New York City will be "linked forever, for better or for worse."
This week, Hemmer's "good bet" was put to the test, with a New York State Judge ruling that the former president had regularly overvalued his properties and assets to banks and investors. Pointing out one instance in which Trump had allegedly inflated the value of the penthouse triplex in his eponymous Manhattan skyscraper by nearly three times its actual worth, Judge Arthur Engoron concluded that a "discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud."
Engoron's ruling, part of New York State Attorney General Letitia James' civil suit against Trump's business empire, effectively "short-circuited" the former president's legal team's plan to argue against the merits of the allegations in court, according to The New York Times. Instead, "no trial was necessary to determine that Mr. Trump’s financial statements were fraudulent," and if the ruling isn't overturned on appeal, any subsequent action will "largely focus on the size of the penalty against [Trump]." Already, though, Engoron's ruling will have an immediate impact on the former president's business empire, with the assets named therein set to be put in receivership and ultimately dissolved.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Poised to lose hundreds of millions in fines, as well as control over vast swaths of his eponymous business empire, is Trump finally finished in the city that made him who he is?
What the commentators said
Facing potential damages upwards of $600 million dollars, former Trump consigliere Michael Cohen suggested his onetime patron could be looking at financial ruin, asking "Will that put him into bankruptcy?" during a CNN interview on Tuesday. No matter the president's total worth, Cohen continued, he "does not have the liquid cash in order to pay that off."
Engoron's ruling is "essentially the equivalent of the corporate death penalty for the Trump Organization in New York State," agreed conservative lawyer George Conway. Noting that the statutory Martin Act relied upon in Engoron's decision allows for "extraordinary remedies" in these cases, Conway predicted that regardless of whatever damages are assigned, the corporate dissolution allowed under the act means the Trump Organization is essentially "out of business."
The decision cuts to the "heart of the identity that made [Trump] a national figure and launched his political career," The New York Times reported, suggesting that although previous prosecutions against the former president have bolstered his standing among his political base, Engoron's ruling "imperils both Mr. Trump’s public image and his business empire."
Comparing the situation to a car owner without a driver's license, former Manhattan Assistant District Attorney Diana Florence told Insider that "without a corporate charter, you can’t operate as a corporation. You can’t get loans, you can’t apply for a government contract." But, cautioned corporate attorney Alex Fisher to the New York Post, while a "regular person would be very concerned about what happened today and they would probably start looking at new shareholders or selling or looking into perhaps transferring certain real estate into various different entities," Trump has been more than willing to "challenge civil rulings or civil outcomes in practicality," meaning "it might not have as big of an effect as somebody thinks it might."
Judge Engoron's ruling doesn't mean AG James' case won't go to trial at all. While acknowledging that "the contour of the case has changed significantly" since he handed down his decision this week, Engoron will still preside over a trial to settle other, unresolved elements of James' suit, as well as to determine the full scope of the damages assigned to Trump. Meanwhile, attorneys have circled around the "previously appointed independent monitor, Barbara Jones" as their choice to become the "independent receiver to manage the dissolution of the cancelled LLCs," ABC News reported.
Trump also plans to immediately appeal Engoron's ruling, according to attorney Alina Habba, who called the decision "fundamentally flawed."
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.