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VOL. 46 | NO. 44 | Friday, November 4, 2022

Judge considers outside monitor for Donald Trump's company

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NEW YORK (AP) — A Manhattan judge said he'll decide Thursday on whether to appoint an independent monitor for former President Donald Trump's real estate empire — a move that would restrict his company's ability to freely make deals, sell assets and change its corporate structure.

Judge Arthur Engoron is weighing an outside watchdog for the Trump Organization as he presides over a lawsuit in which New York Attorney General Letitia James alleges Trump and the company routinely misled banks and others about the value of prized assets, including golf courses and hotels bearing his name.

James' office says the Trump Organization is continuing to engage in fraud and has taken steps to dodge potential penalties from the lawsuit, such as incorporating a new entity in Delaware named Trump Organization LLC — almost identical to the original company's name — in September, just before the lawsuit was filed.

Trump sued James in Florida on Wednesday, seeking to block her from having any oversight over the family trust that controls his company. Trump's 35-page complaint rehashed some claims from his previously dismissed lawsuit against James in federal court in New York, including that her investigation of him is a "political witch hunt."

Engoron, who's been handling Trump-related matters for more than two years, seemed open to appointing a monitor or granting at least some oversight of the Trump Organization while James' lawsuit is pending — though he cautioned that reporters shouldn't "read anything" into questions he asked the lawyers.

Trump lawyer Alina Habba told reporters after Thursday's arguments that she fully expects Engoron to appoint a monitor, pointing to his contentious history with Trump. Last week, the former president lashed out at the judge on social media, calling him "vicious, biased, and mean."

Engoron, a Democrat, repeatedly ruled against Trump while presiding over disputes over subpoenas issued in James' investigation.

The judge held the Republican in contempt and fined him $110,000 after he was slow to turn over documents, and he forced him to sit for a deposition — testimony in which Trump invoked his Fifth Amendment protection against self-incrimination more than 400 times.

"I didn't even see a point in speaking because we're going to lose no matter what," said Habba.

James, a Democrat, is seeking $250 million and a permanent ban on Trump, a Republican, doing business in the state. In the interim, she wants an independent monitor to review and sign off on some of the company's core business decisions, including any asset sales or transfers and potential corporate restructuring.

"Our goal in doing this is not to impact the day-to-day operations of the Trump Organization," said James' senior enforcement counsel, Kevin Wallace. He said the desired oversight would be "limited" and wouldn't involve intricacies, such as how many rounds of golf or hotel rooms they were booking in a given year.

"The Trump Organization has a persistent record of not complying with existing court orders," Wallace said. "It should not be incumbent on the court or the attorney general to spend the next year looking over their shoulder, making sure assets aren't sold or the company restructured."

Wallace said James' office is seeking to stop "fraudulent activities that are ongoing at the Trump Organization" and wants safeguards in place so that the company can't just sell off assets, such as Trump Tower and an office building at 40 Wall Street, that could eventually be used to pay a potential lawsuit judgment.

Trump Organization lawyer Christopher Kise responded that the company has "no intention" to divest those properties, which together he says conservatively have a value of at least $250 million. The "Trump entities are not going anywhere," he added.

Kise argued that James' lawsuit was much ado about common, good-faith disagreements in the real estate industry. If banks that loaned Trump money felt he or the company had acted improperly, they would have spoken up, Kise said.

"There's no problem. There's no case here," Kise said. "It's mind-numbing that we're going to have a receiver insert himself or herself into these complex transactions instead of the owner of this real estate."

Engoron took issue with at least one aspect of Kise's reasoning, asking him if there was really a "good-faith disagreement" when Trump claimed his Trump Tower penthouse was three times its actual size, and $200 million more valuable.

As for the new Trump entity that drew concern from James' office, Kise said the company — listed in a New York corporate filing as Trump Organization II — had nothing to do with dodging potential penalties from James' lawsuit, but rather "consolidation of payroll issues that have arisen in other contexts."

Kise didn't offer additional details. The Trump Organization's payroll practices are among the issues being raised at the company's Manhattan criminal fraud trial, which was halted Tuesday and is expected to resume Monday after a witness tested positive for COVID-19.

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Follow Michael Sisak on Twitter at twitter.com/mikesisak

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TNLedger.com Knoxville Editon
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0