The judge overseeing former President Donald Trump’s New York fraud trial “might have already erred” in his ruling ordering some of his companies to be dissolved, legal experts told The New York Times.
Judge Arthur Engoron ruled before the start of the trial that Trump fraudulently inflated his net worth and ordered some of his New York companies be dissolved. But legal experts told the outlet that Engoron “may have lacked the authority to dissolve the companies.”
An appeals court last week stayed the judge’s punishment while it reviews the order.
“President Trump very much appreciates the court’s consideration and ruling,” Trump attorney Christopher Kise said after the appellate court took up the case, adding that it would help “pave the way for a much needed, and deliberative, review of the trial court’s many errors.”
Engoron could also adjust the order himself, the Times report noted, and use his expected January verdict in the case to amend the punishment before the appellate court rules.
“The judge has extraordinary powers to fashion a remedy to curtail and punish the misconduct, meaning bad news for Trump,” Steven Cohen, a former top official at the New York attorney general’s office, told the Times.
In addition to the $250 million financial penalty sought by New York A.G. Letitia James, Engoron could ban Trump and his company from signing new commercial real estate deals or seeking loans from banks in the state. He could also bar Trump from running any company in the state.
But the part of the order dissolving some of his New York companies is “less likely to stick,” according to the report.
The order canceled a special type of business certificate that allows some of Trump’s New York companies to operate using certain names, according to the report. The order could force about 10 of the former president’s businesses to obtain new certificates but the order also referred to the “dissolution of the canceled LLCs,” or limited liability companies that control Trump’s properties.
Legal experts told the outlet that a judge cannot dissolve an LLC unless one of its members seeks to do so.
“He’s going beyond what the statute seems to allow,” David Lowden, a lawyer who specializes in commercial transactions and corporate law, told the Times, predicting that the order would not destroy Trump’s empire but merely result in a “simple bureaucratic irritation, resolvable through paperwork.”
Other experts noted that the judge applies the order to all 10 of Trump’s New York companies that have the certificate, not just the smaller number cited by James’ complaint. Experts told the outlet that imposing a punishment on a company not accused of wrongdoing could prompt the appeals court to intervene.
“He may have bought himself an appellate problem,” Cohen said, “and fueled an otherwise dubious claim of bias.”
