Former U.S. President Donald Trump gestures on the day of a court hearing on charges of falsifying business records to cover up a hush money payment to a porn star before the 2016 election, in New York State Supreme Court in Manhattan, New York, on Feb. 15, 2024.

Andrew Kelly | Reuters

Former President Donald Trump is gearing up to fight a massive fine in the New York business fraud case that threatens to erase most of the cash he says he has on hand.

But first, he has to secure a bond — and that might not be so easy.

Trump on Friday was ordered to pay about $355 million in penalties, plus more than $98 million in interest after a judge found the former president liable for fraud for manipulating financial statements given to lenders. Every day, the accruing interest adds $87,502 to Trump’s bill.

Unless he wants to pay the entire penalty while his expected appeal is considered, Trump will need to post an appeal bond. This is typically up to 120% of the judgment plus the current interest.

At that rate, Trump’s original ruling with interest would indicate he will need to secure a bond worth more than $540 million. But it’s unlikely that the real estate baron will be able to use his properties as collateral.

It’s “not very attractive to take real estate as collateral,” said Neil Pedersen, owner of New York-based surety bond agency Pedersen & Sons.

Trump could have to liquidate some assets to secure a bond, said Pedersen. The bond company will also charge a fee that could total millions of dollars.

An appeal of Judge Arthur Engoron’s ruling could take years to play out.

A flag supporting former U.S. President Donald Trump outside Trump Tower in New York on Oct. 1, 2023.

Yuki Iwamura | Bloomberg | Getty Images

Another complicating factor: Trump’s status as a presidential front-runner.

It’s an “unprecedented” situation for a potential bond company to commit to, Pedersen said.

“No one’s ever had to enforce an indemnity agreement against what could very well be the next U.S. president,” he said.

Trump has vowed to appeal Engoron’s ruling, which threatens not just his bottom line, but his entire persona as a mega-rich business genius, one that he has carefully cultivated for decades.

But bond agents may have reservations about working with Trump, whose business practices and claims about his wealth have been successfully challenged in court.

Appeal bonds are used to ensure that a person ordered to pay a judgment cannot misuse the courts to delay or avoid making that payment.

“Whoever is going to bond [Trump] is committing that they’re going to make good on that judgment,” said New York business attorney David Slarskey. “Who’s going to do that?”

Trump, who said in a deposition last year that he had “substantially in excess of $400 million in cash,” could technically deposit the full judgment against him, plus interest, as he challenges the judgment. But his lawyer has already said that he will secure a bond.

“We have to post the bond, which is the full amount and some,” Trump attorney Alina Habba told Fox News on Monday.

“We will be prepared to do that,” she said.

Habba said she expects to post a roughly $400 million bond within a 30-day window to file a notice of appeal, which begins after a court clerk enters Engoron’s final judgment.

Engoron also barred Trump for three years from running a business in New York or applying for loans from financial institutions registered with the state.

Habba also appeared to dismiss a question about whether Trump will have to sell off his New York real estate assets as his legal troubles mount.

But Pedersen warned that doing so could cause its own “headache.”

Those assets are not liquid, so if Trump loses the appeal, the process of converting them to cash could be difficult — perhaps even more so in a case that was centered around disputes about the value of Trump’s properties.

Habba did not immediately respond to questions from CNBC about the process of securing an appeal bond.

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Engoron’s judgment in Manhattan Supreme Court came weeks after a jury in a separate civil case in New York federal court ordered Trump to pay $83.3 million for defaming writer E. Jean Carroll. That’s on top of the $5 million that Trump has already been ordered to pay in a separate defamation case brought by Carroll.

After that case was adjudicated, the former president took the unusual step of setting aside a cash deposit of $5.6 million while he pursued an appeal.

Trump critic and attorney George Conway suggested that Trump was unable to secure an appeal bond from a third party. Trump’s lawyers denied this, saying he merely wanted to avoid additional fees that would be charged by a bond company.

But as Trump’s legal penalties soar past the half-billion-dollar mark, Slarskey and others have predicted that Trump may soon declare bankruptcy.

Forbes estimated Trump’s net worth to be roughly $2.6 billion as of February.

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