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Businessman behind Trump’s NY bond says he charged him a ‘low fee’

In World
April 06, 2024

By Koh Gui Qing

NEW YORK, April 5 (Reuters) – Don Hankey, the billionaire businessman whose company Knight Specialty Insurance provided the $175 million bond that Donald Trump posted in his New York civil fraud case, told Reuters that the fee his firm charged the former U.S. President was low.

Hankey, who backed Trump as a presidential candidate in 2016 and has said he supports his re-election, has maintained that providing the bond was a business decision. He declined to disclose the fee, but said it was low because Knight did not think there was much risk involved.

Lawyers say surety companies typically charge a fee of between 1% and 2% of the face value of the bond.

Hankey said he now feels Knight did not charge Trump enough because of New York Attorney General Letitia James’ subsequent scrutiny of the bond, as well as the media attention around it.

“We thought it would be an easy procedure that wouldn’t involve other legal problems and it’s not turning out that way. We probably didn’t charge enough,” Hankey said in an interview.

“We have been getting a lot of emails, a lot of phone calls. Maybe that’s part of the reason he had trouble with other insurance companies,” Hankey said, adding that despite the issues, he did not regret providing the bond.

Trump posted the $175 million bond on April 1, as he appeals a $454 million fraud judgement against him for overstating his net worth and the value of his real estate to dupe banks and insurers, in a case brought by James.

On Thursday, James’ office questioned the $175 million bond, asking that Knight provide proof that it has enough assets to pay if Trump’s appeal fails. A New York judge will hold a hearing on the matter on April 22.

Hankey, whose net worth is pegged by Forbes at $7.4 billion, said he was taken aback by James’ questioning the bond. “I’m surprised they’re coming down harder on our bond or looking for reasons to cause issues with our instrument,” he said.

Hankey, who runs a group of businesses including a provider of subprime automotive loans that has been reprimanded by regulators for predatory behaviour involving customers, said Trump offered collateral for the $175 million in cash.

He said the cash is held at a brokerage firm and pledged to Knight, and that Knight can access it if needed.

“I don’t know if it came from Donald Trump or from Donald Trump and supporters,” Hankey said of the cash Trump provided for collateral.

Hankey said he first approached Trump’s representatives to discuss how he could help Trump with the bond, before the former president managed to get it reduced on appeal from $454 million to $175 million. Trump would have had to “come up with a lot of collateral or somebody else would,” Hankey said.

Hankey said he understood from Trump’s representatives that Trump did not have $454 million in cash.

Trump last month said in a post on his social media platform Truth Social that he had “almost five hundred million dollars in cash.” In an April 2023 deposition with James, he said he had “substantially in excess of $400 million in cash.”

A spokesperson for Trump did not respond to a request for comment. (Reporting by Koh Gui Qing in New York; Editing by Greg Roumeliotis and Bill Berkrot)

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