Deadline for Trump to pay penalty in fraud case arrives: What happens next?

Former President Donald Trump faces a deadline Monday to pay the $454 million penalty in the civil fraud judgment against him or the state of New York will have the opportunity to seize his properties while he appeals the ruling – though it remains unclear what will happen if he fails to do so.

In February, a New York judge ruled that Trump fraudulently overstated his net worth and the value of his real estate properties to secure more favorable terms for loans and other transactions. The judge imposed a fine of $354 million plus interest that took the total penalty to $454 million, which Trump will have to pay outright or post a bond covering the full amount while he appeals the ruling.

Trump has denied that he tried to deceive anyone through the financial dealings in question. His legal team has appealed the ruling in an effort to allow him to continue his appeal after posting a smaller amount or defer posting the judgment until the end of the appeal. The appeals court hasn't issued a ruling on the request.

His lawyers have said in court filings that Trump's team has approached over 30 surety companies that could guarantee the bond have thus far turned him down. They said that to obtain a bond, Trump would likely have to put up 120% of the judgment, or more than $557 million in this case, and that he would need about $1 billion in cash or cash equivalents to collateralize the loan to still have enough capital to operate the business.

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In a social media post on Friday, Trump said that he currently has almost $500 million in cash on hand but that he planned to use "a substantial amount" of that funding for his presidential campaign. A Trump Organization document that was included as evidence during the trial indicated Trump had $293.8 million in "cash and cash equivalents" at his disposal in 2021, though it's unclear what that figure is at present.

If he's unable to post a bond, Trump's lawyers are also looking to avoid such a "fire sale" of his properties, arguing that rushed sales of property assets "would inevitably result in massive, irrecoverable losses," wrote attorney Clifford Robert. 

The state of New York could also move to seize Trump's assets to secure the judgment against him by securing a lien on some of his properties and eventually foreclosing on the property. However, the presence of mortgages and liens on those properties as well as the partnerships and other legal entities that control them could make that a time-consuming process.

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This month, New York State Attorney General Letitia James registered formal notice of the civil court judgments against Trump in suburban Westchester County – which is home to the Trump Organization's Seven Springs estate and the Trump National Golf Course Westchester.

The registrations, made on March 6, don't necessarily mean the attorney general will move to seize the properties in the near future. However, they are a procedural step that would have to be taken if James moves to seize them in the future.

The Trump Organization did not immediately respond to a request for comment.

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Former federal prosecutor Alex Little discussed the case in an appearance Sunday on "FOX News Live" and said that he's skeptical that Attorney General James would start with attempting to seize and sell Trump's properties because "many of them have mortgages and liens against them already, so there's not a great deal of money in those properties to go to the attorney general." 

"I think she's much more likely to go after investment accounts, cash accounts if she's truly trying to collect," Little said. "I think it's quite possible that she attaches investment accounts and bank accounts tomorrow because that will just require really a document to be sent to where those accounts are saying, 'You can't spend that money, you've got to hold it until I ask for it, and I'm going to ask for it here in the next period of days.'"

Little said of Monday's deadline that "nothing is going to happen automatically until the attorney general starts to file documents to seize those bank accounts and to try to potentially secure liens against some of those assets."

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As for the prospects of Trump reducing or waiving the bond requirement levied against him, Little said that he thinks it's unlikely the appellate court will grant that request and that it will cause a cash crunch for the former president.

"I think it's very, very unlikely that President Trump is going to get the reduction of the bond from the appellate department, so you're going to see some sort of bond go into place, or you're going to see the accounts start to be seized," Little said. "Whether it's a bond done by a private party or the attorney general the effect is the same, because when you get a bond they want collateral, so they're going to seize that collateral or have some control over it."

"The effect is going to be, after [Monday], the former president's going to have a lot of difficulty spending money that he currently has in his accounts, and/or selling any of the real estate or property that he owns," Little added. "It's going to really cause a cash crunch for President Trump."

Reuters contributed to this report.