A civil decision, which provides for a fine in the amount $355 million for fraud Donald Trump may reduce the cash reserves of the former US president in the coming months and severely limit his ability to obtain loans, Reuters reports.

Here’s an explanation of how a New York state judge’s order issued Friday could affect the finances of Trump, who is seeking the Republican nomination to challenge Democratic President Joe Biden in the Nov. 5 U.S. election.

What was the decision?

Judge Arthur Engoron found that Trump had fraudulently inflated his net worth to get better loan terms.

In addition to imposing monetary penalties, it banned Trump from running a corporation in New York for three years and ordered that no bank incorporated or incorporated in the state extend loans to Trump and several of his companies and entities for three years.

Trump has denied wrongdoing and called the case a political vendetta against New York Attorney General Leticia James, a Democrat.

How will this decision affect Trump’s real estate empire?

Trump’s holdings consist of a global network of about 500 entities that include real estate, licensing and other activities.

The former president’s finances are not transparent, but Forbes estimates his fortune at $2.6 billion, most of which is related to real estate.

In an April statement, Trump said he had about $400 million in cash.

While he may sell some of his portfolio to satisfy the court order, it is unclear how much his assets are worth given the problems in the real estate sector.

Does Trump have the money to pay the entire fine?

A ban on borrowing from banks incorporated or incorporated in New York could severely limit Trump’s ability to raise cash.

In addition to a $354.9 million judgment in a civil fraud case, Trump must pay $83 million to author E. Jean Carroll after a jury found he defamed her when he denied raping her in the 1990s. x years

In May 2023, another Manhattan jury ordered Trump to pay Carroll $5 million in damages after a trial in a separate defamation and sexual assault case she filed against him.

Trump denies raping Carroll. He is appealing the first sentence and has said he will appeal the second.

E. Jean Carroll and Donald Trump Photo: Kena Betancur / AFP / Profimedia

Trump’s portfolio could get a big boost if he sells his stake in his social media platform Truth Social, which has seen a sharp rise in value as his bid to return to the White House gathers momentum.

Trump’s stake in that company, Trump Media & Technology Group, is now worth about $4 billion, based on stock trading in the black-check acquisition company that agreed to merge with it. If the deal goes through, Trump could sell his shares in six months.

US financial regulators gave the green light to the deal this week, raising the prospect of it closing in the first half of 2024.

Can Trump use campaign funds to pay the fine?

No, because unlike many of Trump’s legal problems, the case brought by James was not related to his campaign or his conduct as president or political candidate.

Some legal experts said the damages awarded were purely personal expenses, despite claims by Trump and his lawyers that the lawsuit against him was politically motivated.

When will Trump have to pay?

Trump’s lawyers promised to appeal the decision.

In any appeal, he may be required to pay the full amount of the judgment plus interest, which is standard practice in such cases.

Trump could also offer a smaller amount with collateral and interest by securing a loan called an “appeal bond.” But he may have trouble finding a lender after Engoron decided he had lied to banks about his wealth.

The appeal could take more than a year, and it is not yet clear whether the appeals court will stay Engoron’s Friday ruling during the trial.

What if Trump doesn’t pay?

If he exhausts his appeals and refuses to pay in the civil fraud case, Trump could face contempt of court charges and additional fines.

The state could also try to garnish Trump’s wages. Prison would be possible, but very unlikely. (Reuters)