What happens if Trump can’t get a $454 million loan?

Lawyers for Donald Trump on March 18, 2024, told a New York court that the former president has been unable to secure a US$454 million bond as he appeals a New York civil fraud ruling against him.

Their “diligent efforts” reportedly involved approaching about 30 bond companies, which all said “no.”

Time is running out for Trump, who has until March 25 to either secure the bond, known as an appeal bond, or pay that amount himself in cash.

The Conversation asked Will Thomas, a business law professor at the University of Michigan, to explain why Trump needs an appeal bond and what happens if he doesn’t get it by the deadline.

What’s an appeal bond?

An appeal bond, sometimes referred to by the Latin supersedeas, meaning “you shall desist,” is a guarantee that the party appealing a ruling against them can and will pay the judgment if their appeal is ultimately unsuccessful. The person appealing the ruling is known as the appellant.

Appeal bonds are offered by licensed providers such as insurance companies and bondsmen who specialize in offering these kinds of guarantees. It’s common in civil cases for the appellant to get an appeal bond.

In order to convince a bondsman to give you an appeal bond, you need to offer them collateral, such as real estate or other assets, in exchange. That way, in case they end up on the hook for the appellant’s judgment, they can sell the collateral to pay it.

The size of the appeal bond is larger than the actual judgment – in Trump’s case, the judgment is $355 million – because the appellant will be expected to pay interest on the original judgment should they lose their appeal. The bond is meant to cover whatever those estimated costs will be.

So, for example, Trump recently appealed an $83