The agreement cut short a potential day-long court hearing in Manhattan that was to feature witnesses.
As part of a deal struck during a 20-minute recess, lawyers for Trump and Knight Specialty Insurance Co. agreed to keep the $175 million in a cash account that will gain interest but faces no downside risk. The account so far has grown by more than $700,000.
The bond stops the state from potentially seizing Trump’s assets to satisfy the more than $454 million that he owes after losing a court case brought by the Democratic attorney general. She had alleged that Trump, along with his company and key executives, defrauded bankers and insurers by lying about his wealth.
The ex-president and presumptive Republican nominee denies the claims and is appealing the judgment.
Judge Arthur Engoron, who in February issued the huge judgment after concluding that Trump and others had deceived banks and insurers by exaggerating his wealth on financial statements, presided over Monday’s hearing and at times was caught in a testy exchange with Trump attorney Christopher Kise.
Engoron challenged Kise with examples of how the money Trump had posted might not be available for collection if the judgment were upheld, leading Kise to respond in one instance that the judge’s “hypothetical is … wildly speculative.”
At another point, Kise expressed frustration with the office of New York Atty. Gen. Letitia James, saying: “It appears that no matter what we do they’re going to find fault with it.”
But Andrew Amer, an attorney for New York state, proposed settlement terms soon after he began speaking at the hearing. He said the state wanted extra assurances because Trump had raised the money with help from a relatively small out-of-state insurance company.
As part of the deal, Knight Specialty Insurance, a Wilmington, Del.-based part of the Los Angeles-based Knight Insurance Group, will have exclusive control of the $175 million and will submit to the jurisdiction of the New York state court while agreeing not to move the money into mutual funds or other financial instruments.
Speaking to reporters in the hallway outside Trump’s separate criminal hush-money trial, his attorney, Alina Habba, said Engoron “doesn’t even understand basic principles of finance.”
“We came to an agreement that everything would be the same, “ she said. ”We would modify terms and that would be it.”
Trump also railed against Engoron, accusing him of not understanding the case.
“He challenged the bonding company that maybe the bonding company was no good. Well, they’re good. And they also have $175 million of collateral — my collateral,” he said.
Neumeister writes for the Associated Press. AP writer Jill Colvin contributed to this report.