Former President Donald Trump's company is appealing a judge's decision to appoint an independent monitor to oversee its business dealings while it is being sued for fraud by New York's attorney general.
Lawyers for the Trump Organization filed paperwork Monday seeking to challenge Manhattan Judge Arthur Engoron’s decision, issued last Thursday, in a mid-level state appellate court. They are also seeking a stay to prevent Engoron's ruling from taking effect while the appeal is pending.
In court papers, the company's lawyers argued that Engoron overstepped his bounds by requiring an outside watchdog keep tabs on the Trump Organization for the duration of Attorney General Letitia James’ civil case.
Engoron's ruling, the lawyers said, essentially handcuffed the company — restricting its ability to freely make deals, sell assets and change its corporate structure, and putting “immediate and unlawful prejudgment restraint” on what they said was nearly $5 billion in assets.
A message seeking comment was left with James' office.
James' lawsuit, the product of a three-year investigation, alleges Trump and the Trump Organization misled banks and others about the value of prized assets, including golf courses and hotels bearing his name.
James, a Democrat, is seeking $250 million and a permanent ban on Trump, a Republican, doing business in the state.
James' office sought an independent monitor after it said it found evidence that showed the company was taking steps to dodge potential penalties from the lawsuit, such as incorporating a new, similarly named entity — Trump Organization LLC — in September, just before the lawsuit was filed.
Engoron wrote in an 11-page order that Trump and the Trump Organization “demonstrated propensity to engage in persistent fraud” and that appointing an outside monitor “is the most prudent and narrowly tailored mechanism to ensure there is no further fraud or illegality” pending the resolution of the lawsuit.
Christopher Kise, a lawyer for the Trump Organization, said in a statement that Engoron's order “grossly expands” the power of New York's attorney general “to interfere in private commercial transactions” and “imposes vague and onerous obligations which will impede the operations of an extraordinarily successful business empire.”
Engoron barred the Trump Organization from selling or transferring any noncash assets without giving the court and James’ office 14 days notice. The to-be-named monitor will be charged with ensuring the company’s compliance and will immediately report any violations to the court and lawyers for both sides.
The Trump Organization also must grant the monitor access to its financial statements, asset valuations and other disclosures, must provide a full and accurate description of the company’s structure and must give the monitor at least 30 days notice of any potential restructuring, refinancing or asset sales, Engoron said.
Engoron set a Thursday deadline for lawyers from James' office and the Trump Organization to each submit a list of up to three monitor candidates. After that, Engoron said, the parties will have five days to comment on the other side's candidates before he makes his choice.
That timeline is moot if the appellate court issues a stay blocking Engoron's ruling. In that case, the Trump Organization would be spared a monitor unless the appellate court either rejects the company's appeal or upholds Engoron’s decision.
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Follow Michael Sisak on Twitter at twitter.com/mikesisak
