According to The Daily Beast, New York Attorney General Letitia James has very good reason to question “the surety” of Knight Specialty Insurance Company, the company that rescued Trump from his $175 million bond requirement to appeal the $464 million judgment against him in the New York fraud case. For one thing, its free cash does not meet New York State requirements for a bond. For another, the company does not seem to have authorization to do business in New York.
It looks like Trump’s lawyers tried to cover up his savior’s financial insufficiency.
From TDB:
On Thursday, Trump’s lawyers posted paperwork listing the finances behind two companies—Knight Specialty Insurance Company and another entity named Knight Insurance Company LTD—which together claim to have assets totalling $2.7 billion. However, only the first of those two is actually listed in the court documents as agreeing to front the money if Trump loses the case.
Knight Specialty Insurance Company alone doesn’t have the “surplus” listed in financial statements to meet the capital requirements for posting the bond. New York law limits how much money state-regulated surety companies can post on a single bond to 10 percent of what’s referred to as the firm’s total “capital and surplus.”
In a midday court filing, the Knight Speciality Insurance Company revealed that it currently only has $138 million in “surplus.” That means the bond it has decided to post for Trump smashes through the 10 percent barrier, topping a whopping 127 percent of the company’s dedicated reserves.
Believe it or not, the president of Knight Specialty Insurance justified the insufficiency by saying New York’s capital requirements don’t apply because it’s not registered to do business as a surety in the state.
Worse, the insufficient $138 million may be inflated Jose Pagliery suggests:
Thursday’s filing raises serious questions about the risk to New York state. Knight Specialty’s “capital and surplus” has remained even lower than its current $138 million in the past four years, according to an assessment by a government-created Texas nonprofit that tracks these types of figures. Knight Specialty had $57 million available in 2020, $80 million in 2021, and $101 the following year, according to the Surplus Lines Stamping Office of Texas.
Another red flag is that Knight Specialty’s original paperwork did not properly include the required financial data. Its original bond posting was rejected by New York court clerks who ordered it be corrected.
Lawyer Max Kennerly makes a good argument that Knight Specialty's finances are even shadier. He notes that Knight Insurance, the parent of Trump's bond company, improperly listed his I.O.U. as an asset and backdated it to December 31, 2023.
Whatever is going here, it suggests that Trump was unable to get a reputable backer even for his greatly reduced bond amount. It's also yet another example of how Trump always hires the “best people.”
AG James has given Team Trump 10 days to “justify the surety.”
