Former President Donald Trump’s request to stay his civil business fraud trial in New York was rejected by an appeals court on Friday, but the court did agree to halt a judge’s order canceling the business certificates of Trump’s companies in the state while he appeals.
The new ruling allows the high-profile trial, now wrapping up its first week in Manhattan Supreme Court, to continue uninterrupted. However, it pauses the threatened dissolution of the Trump Organization while the case makes its way through the appeals process.
The decision came after Trump’s legal team filed an emergency appeal earlier this week seeking to pause the trial. They argued the judge’s pretrial summary judgment finding Trump liable for fraud was incorrect.
New York Attorney General Letitia James, who brought the $250 million lawsuit against Trump, his companies and top executives in September, opposed delaying the trial but did not object to temporarily staying the cancellation of the business certificates.
In a statement Friday, James said the certificates had not yet been revoked and her office proposed appointing someone to oversee that process while naming potential candidates. The pause gives both sides time to fully litigate the appeals.
Trump’s lawyer Christopher Kise said in a statement that they are “very pleased” the court “put a halt to any cancellation of business certificates, receivers or dissolution.” Kise claimed this as a victory, but James refuted that characterization, saying the proposal to halt the dissolutions came from her office.
The high-stakes trial in New York is slated to run through mid-November, keeping Trump in the spotlight as he mounts another run for the presidency in 2024.
Lawsuit Accuses Trump Companies of Widespread Financial Fraud
James filed the lawsuit against the Trump Organization, Trump and his children Donald Trump Jr. and Ivanka Trump in September after a three-year investigation into the former president’s business practices.
The suit alleges the Trumps engaged in years of fraudulent asset valuation and financial reporting at the Trump Organization to obtain favorable interest rates, insurance coverage and tax deductions.
Prosecutors say Trump inflated his net worth by billions of dollars and misled lenders and insurers with false financial statements. The complaint includes dozens of specific real estate deals and financial documents where the Trumps are accused of fraud.
If found guilty, the defendants could face bans from conducting business in New York and civil fines. The lawsuit does not carry criminal charges.
The former president denies any wrongdoing, claiming the investigation is a politically motivated “witch hunt” by Democrats. But Judge Arthur Engoron ruled in October that James’ office had provided enough evidence to likely prevail at trial.
Engoron issued a partial summary judgment finding Trump liable for a scheme to defraud and banned him from commercial real estate transactions in New York for five years. The remaining issues are now being determined by a jury, with witness testimony underway.
Appeals Court Declines to Halt Trial Mid-Stream
Soon after Engoron’s pretrial ruling, Trump’s legal team filed an emergency appeal seeking to halt the trial pending further litigation over the summary judgment decision. They argued it was unfair for the trial to move ahead when liability had already been decided.
But the appellate court rejected that bid on Friday, allowing the high-profile proceedings to continue. In a statement, a spokesperson for James’ office said Engoron’s liability decision was soundly based on extensive document evidence and testimony.
However, the appeals court did agree to temporarily stay the cancellation of the Trump Organization’s corporate certificates and any receivership appointments while the appeal runs its course. This provides assurance that the company can continue operating normally during the trial.
James Did Not Oppose Pausing Company Dissolutions
Notably, while James opposed delaying the trial itself, she did not object to putting the dissolutions on hold, according to court documents. Her office had proposed appointing someone to oversee that process if needed.
This likely influenced the appeals court’s differentiated ruling allowing the trial to continue but pausing the corporate liquidations. The decision gives both sides time to fully argue the issues on appeal before any dissolutions occur.
Trump’s legal team claimed the ruling as a wholesale victory. But James refuted that, saying her own proposal to the court made it possible. The pause simply maintains the status quo until the appeal is decided.
Either way, the bifurcated ruling ensures Trump will remain in the public eye with an ongoing fraud trial in New York while ramping up his latest run for president. The case is expected to last six more weeks.
Trump Organization Faces Potentially Damaging Penalties
If the jury finds the Trump defendants guilty and the verdict survives appeal, the penalties could impact the Trump Organization’s operations and finances.
In addition to banning Trump from transacting business in New York real estate for five years, the company could face curbs on asset sales. Civil fines of up to $250 million could also be levied for persistent illegal activity.
However, the Trump Organization would likely have opportunities to remedy any fraudulent practices before facing dissolution. But the court’s decisions so far indicate judges have lost patience with Trump’s repeated denials.
While the appeal runs its course, the company avoids any immediate consequences. But the trial itself threatens to expose unflattering internal business dealings just as Trump seeks reelection.
Witness testimony so far has revealed questionable practices like inflating property values out of thin air. More revelations are likely as the trial continues over the coming weeks, promising uncomfortable scrutiny for Trump.
The case illustrates how the former president’s refusal to release his taxes and financial records as past candidates have done leaves many questions about his business empire unanswered. Trump continues facing multiple legal battles and investigations as he wages his third campaign for the White House.