New York Attorney General Letitia James is reportedly seeking to apply the “corporate death penalty” to former President Donald Trump’s main Manhattan-based business, and going by her office’s record, she may ultimately be successful.
The rarely used procedure allows an AG to completely dissolve a corporation so that it no longer exists. In other words, Trump’s business empire would literally disappear.
The call for the “corporate death penalty” to be applied is expected to be included in “a massive, long-threatened … multi-hundred-page lawsuit against the Trumps and his Manhattan-based business,” according to Insider.
“The lawsuit will seek steep financial penalties for an alleged decade-long pattern of playing fast and loose with the assessed values of Trump Organization properties,” Insider reported Wednesday.
However, potential fines and back taxes “may be the least of what Trump’s facing.”
According to Insider, “James has signaled she will also seek the dissolution of the business itself under New York’s so-called corporate death penalty — a law that allows the AG to seek to dissolve businesses that operate ‘in a persistently fraudulent or illegal manner.'”
NY AG Tish James has signaled she may seek dissolution of Trump’s business under New York’s so-called corporate death penalty — a law that allows the AG to seek to dissolve businesses that operate ‘in a persistently fraudulent or illegal manner.’
— Mark Elliott (@markmobility) August 10, 2022
Is this possible? Absolutely. In fact, it already happened to Trump once before thanks to former New York Assistant Attorney General Tristan C. Snell.
In 2013, Snell led a successful lawsuit against Trump University that resulted in the school being completely shut down thanks to the “corporate death penalty.”
Speaking with Insider, Snell said that applying the “corporate death penalty” against Trump’s main business would mean the crumbling of his entire empire.
“This cuts right to the crown jewel of his real estate portfolio. It’s everything, because at issue is Trump Tower [where the Trump Organization is headquartered in Manhattan], at issue is 40 Wall Street, which is one of his most beloved properties and probably one of the more valuable ones,” he said.
“All of his golf courses are also at stake, so it’s a big deal. Trump would basically have to divest of his properties. He could try some sleight of hand and have his operations be covered under some other new sort of corporate entities, but it would definitely be a significant black eye.”
In tweets, Snell further speculated that Trump’s decision Wednesday to plead the Fifth may have been the nail in the coffin. While pleading the Fifth is not indicative of guilt, it does apparently make it easier to apply the “corporate death penalty.”
“This is a civil case — so the court can draw an inference of liability. This is exactly what the AG was hoping to achieve. The case is now even stronger,” Snell tweeted.
BREAKING: Trump pleads Fifth, refuses to answer NY AG questions about Trump Organization’s alleged tax and financial fraud.
This is a civil case — so the court can draw an inference of liability.
This is exactly what the AG was hoping to achieve. The case is now even stronger.
— Tristan Snell (@TristanSnell) August 10, 2022
Though knowing Trump, even Snell agreed that pleading the Fifth was ultimately in his best interest.
“Every case I’ve ever heard of with him, as soon as he ends up being on the record, he is in those situations not too dissimilar to his public persona. I mean, he’s a little bit more careful, but not that much. I’m sure they got practically nothing from Ivanka,” he added. “I’m sure she testified cautiously and in a very dry, robotic way,” he told Insider.
That being said, in his tweets, Snell added that the NY AG’s office is already “2 for 2.” It was a reference to both what happened to Trump University and also the Trump Foundation.
“The Donald J. Trump Foundation, once billed as the charitable arm of the president’s financial empire, agreed to dissolve on Tuesday and give away all its remaining assets under court supervision as part of an ongoing investigation and lawsuit by the New York attorney general,” The New York Times reported in 2018.
“The foundation was accused by the attorney general, Barbara Underwood, of ‘functioning as little more than a checkbook to serve Mr. Trump’s business and political interests,’ and of engaging in ‘a shocking pattern of illegality’ that included unlawfully coordinating with Mr. Trump’s 2016 presidential campaign.”
It’s worth remembering that the NY AG is 2 for 2 so far in bringing Trump to justice — on Trump University and the Trump Foundation.
— Tristan Snell (@TristanSnell) August 10, 2022
And so things aren’t looking so great for Trump at the moment. What remains to be seen is what all will be included in James’ expected lawsuit. Snell, for his part, expects it to be brimming with bombshells.
“It will be heavy artillery. It’s going to be a big, big, big bomb that’s going to drop. This is going to be voluminous. It’s going to be a book,” he said of the lawsuit.
Maybe, maybe not. But just remember, this is the exact same thing they once said about the Mueller report …
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