Trump’s New Delaware Entity Warrants Asset Restriction, NY Says

On the same day Donald Trump was hit with a $250 million civil-fraud suit by the state of New York, the former president’s real-estate company registered a new entity based in Delaware that could potentially be used to shield his asserts, a Manhattan judge was told.

The registration of “Trump Organization II LLC” with New York officials on Sept. 21 raised concerns that Trump “may be seeking to move assets out of state,” New York Attorney General Letitia James said in a court filing Thursday seeking to restrict such transfers.

James asked the court to issue a preliminary injunction barring the defendants from moving any significant assets during the litigation. An injunction is necessary to ensure the Trump Organization has sufficient funds “to satisfy any disgorgement award” in the case, and because the allegedly fraudulent scheme is “ongoing,” James said in a statement.

Her request for an injunction is a significant escalation in a lawsuit that accuses Trump, three of his children and his New York-based company of inflating the former president’s net worth for years by billions of dollars to deceive banks and insurers.

“Donald Trump and the Trump Organization have continued those same fraudulent practices and taken measures to evade responsibility” since the suit was filed Sept. 21, said James, a Democrat.

Read More: Trump Sued by New York Over ‘Fraudulent’ Asset Valuations

James argues an injunction is warranted in part because Trump’s company may be attempting to restructure its business through Trump Organization II LLC, which was incorporated in Delaware on Sept. 15, less than a week before the widely expected suit was filed.

“That entity is a foreign corporation that was incorporated in Delaware,” James said. “The Trump Organization has since refused to provide any assurance that it will not seek to move assets out of New York to evade legal accountability.”

Trump lawyer Alina Habba said an injunction isn’t necessary because Trump’s company has promised not to engage in improper conduct. She also renewed the former president’s claim that James is using the litigation to advance her political career. She didn’t immediately respond to a question about the purpose of the new Trump entity.

“We have repeatedly provided assurance, in writing, that the Trump Organization has no intention of doing anything improper,” Habba said in a statement. “This is simply another stunt which Ms. James hopes will aid her failing political campaign.”

The attorney general said Trump’s company should also be required to ensure new financial disclosures to banks and insurers “contain all supporting and relevant material.” James also is seeking the appointment of an independent monitor to ensure compliance with the proposed order.

Alan Garten, a lawyer for the Trump Organization, didn’t respond to a message seeking comment.

The attorney general said she’s also seeking court permission to serve Trump and his son Eric Trump electronically because they and their lawyers “have refused to accept service of the complaints for almost a month.”

James alleged in her suit that Trump and his company from 2011 to 2021 inflated the value of numerous properties, including a Lower Manhattan skyscraper, his Fifth Avenue penthouse apartment and his Florida estate, Mar-a-Lago, to obtain more favorable loan terms, cheaper insurance, lower tax bills and other “incredible financial benefits.”

The case is New York v. Donald Trump, 452564/2022, New York Supreme Court, County of New York

(Updates with detail on Trump’s new Delaware entity)

To contact the reporter on this story:
Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story:
Katia Porzecanski at kporzecansk1@bloomberg.net

Steve Stroth

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