NEW YORK — The Trump Organization asset transfers and other transactions will be overseen by an independent monitor, a Manhattan judge said Thursday, as the judge presides over an upcoming trial in a $250 million lawsuit brought by the attorney general of New York that could cripple the company’s operations.
Judge rules in favor of assigning monitor to oversee Trump organization
New York Supreme Court Justice Arthur Engoron has ruled in favor of a request by Attorney General Letitia James to impose surveillance conditions on the international real estate, golf and hospitality company of former President Donald Trump, based in Trump Tower on Fifth Avenue.
Under Engoron’s decision, the company and the Trump family are barred from transferring or selling assets without giving the court two weeks’ notice. The company must also pay the monitor, which Engoron will approve, and that person will oversee attempted asset transfers and screen all future reports of Trump’s net worth to financial and insurance institutions.
“This court finds that the appointment of an independent monitor is the most prudent and closely tailored mechanism to ensure that there is no further fraud or illegality… pending the final determination of this action. “wrote the judge.
Trump, along with three of his adult children who served as company executives, were sued by James for their alleged misrepresentation of the value of Trump’s personal wealth. The tactics, according to the lawsuit, involved playing with the value of properties and land leases and presenting them to banks, lenders and insurance companies in statements of financial position prepared each year.
James said in a recent court filing that since the lawsuit was filed in late September, the company has “continued to use practices it knew to be inappropriate or fraudulent.”
Trump attorney Chris Kise said in a statement that company officials involved in the transactions “were fully capable of negotiating complex deals.”
The court order “effectively seizes control of the financial affairs of a highly successful private empire based on nothing more than a gross exaggeration of the standard valuation differences common in complex commercial real estate finance transactions,” it said. Kise said.
Lawyers for the attorney general’s office said Trump registered a new corporate entity called Trump Organization II, incorporated in Delaware, the same day the lawsuit was announced, Sept. 21. commercial activities that the Attorney General seeks as a remedy in the case.
In an Oct. 13 filing, Assistant Attorney General Kevin Wallace argued that the Trump Organization “now appears to be taking steps to restructure its operations to avoid existing liabilities under New York law.”
The monitor should oversee the company’s preparation of any financial condition reports that will be used in the future to meet lender requirements. Many large loans require updated financial reports to maintain the terms of an agreement. The Trump Organization owes one to Deutsche Bank for its exceptional loan from Trump International Chicago, according to the attorney general.
The Trump Organization is on trial in a separate criminal case in Manhattan over an alleged 15-year tax evasion scheme involving executive compensation such as expensive cars and expensive apartments. In those proceedings, the organization’s longtime comptroller Jeffrey McConney began giving evidence this week, but the trial was adjourned until Monday after McConney tested positive for coronavirus.
Manhattan District Attorney Alvin Bragg, who is prosecuting the compensation case, is also investigating whether to bring a criminal case against Trump for the allegedly fraudulent asset valuation practices.