Trump $175 Million Bond Arranged by Billionaire Supporter’s Firm

A billionaire Donald Trump supporter whose California company is known for subprime auto loans offered to arrange the former president’s $175 million appeal bond in New York state’s civil fraud suit, though he said politics had nothing to do with it.

Don Hankey, whose fortune stems from car dealerships, real estate investments and financial services, is chairman of Knight Specialty Insurance Co., which posted Trump’s bond on Monday, three days before a court-imposed deadline. The bond gives Trump a lifeline by putting a $454 million judgment on hold while he appeals.

Hankey said Knight reached out to Trump’s team to offer its services after hearing about the former president’s well-documented trouble arranging a bond, which was initially set at 120% of the judgment, or about $540 million. The appeals court lowered the bond to $175 million after Trump said he didn’t have enough cash.

Trump Pays $175 Million Bond to Avert Asset Seizure

“I heard they were looking for somebody and this is what Knight insurance does,” Hankey, whose net wealth is estimated at $7.4 billion by Forbes magazine, said in an interview. “We have the liquidity and I’m just happy to provide it.”

Hankey, 80, said his support for Trump had nothing to do with his decision to offer his company’s services to the former president, who is campaigning to return to the White House in the November election.

“Yes, I voted for him in the past, but this is a business deal and this is what we do,” Hankey said. “I have never met Donald Trump nor talked to him on the phone.”

The niche appeal bond industry was thrust into the spotlight earlier this year after Trump lost two civil trials with combined damages of more than half a billion dollars. The court requirement that bonds equal 110% to 120% of a judgment is intended to ensure a trial loser will pay the winner if their appeal fails.

Hankey said that Trump’s lawyers used all cash collateral for the bond, after initially offering 20% cash and 80% investment-grade bonds.

“We were fine with the investment grade bonds,” Hankey said, adding that decision to use all cash came from Trump’s team.

Knight is one of several affiliated companies that are part of the Los Angeles-based Hankey Group, a homegrown empire that also owns Westlake Financial Services, Hankey Capital and a Toyota dealership in North Hollywood.

In January, a jury hit Trump with $83.3 million in damages in a defamation suit by writer E. Jean Carroll. A few weeks later the judge overseeing New York’s fraud case ordered Trump to pay $454 million for inflating the value of his assets in bank transactions for more than a decade to get better terms on loans.

Trump used a unit of Chubb Ltd. to arrange his bond in the Carroll case. But the sheer size of the fine in the New York fraud case made a bond difficult if not impossible to arrange.

Trump said 30 companies he reached out to would only take cash, and that he didn’t have enough, raising the prospect that New York Attorney General Letitia James, who filed the fraud suit, could start seizing his assets.

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Copyright 2024 Bloomberg.

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