The outcome represents a sharp reversal of Judge Arthur Engoron’s decision last year, which not only concluded that Trump had repeatedly overstated his financial position but also ordered him to pay $355 million in penalties, an amount that swelled with interest. By tossing out the financial hit but maintaining governance bans, the appeals court sought to draw a line between punitive fines and targeted remedies.
Judges call penalty “excessive”
In a lengthy 323-page ruling marked by multiple concurring and dissenting opinions, the appellate division underscored its view that Engoron’s disgorgement order violated the Eighth Amendment. “While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the court’s disgorgement order…is an excessive fine,” Judges Dianne T. Renwick and Peter H. Moulton wrote.
The ruling, which comes seven months after Trump returned to the White House, spares him from a payout that threatened to rattle the finances of his real estate empire. Trump had already posted a $175 million bond to stave off collection.
Still, the decision leaves open a potential appeal to New York’s highest court, a path that Attorney General Letitia James may pursue. James, who brought the civil case, has repeatedly described Trump’s conduct as “lying, cheating, and staggering fraud.” Her office had no immediate comment.
A divided court
The appellate panel did not deliver a majority opinion but instead issued a patchwork of findings. Two judges emphasized that James proved her case but imposed penalties beyond what the law allowed. Another judge argued the attorney general exceeded her authority altogether, contending that lenders could have pursued remedies if they believed they had been misled.