After a hearing on Friday, an appeals court granted a stay, or pause, on a judge's order that former President Donald Trump's businesses be dissolved.
This was only a partial victory for President Trump, as the appeals court said the trial that began this week could continue.
The prosecutors had opposed the request for a delay, accusing the defense attorneys of attempting "to sow chaos" and disruption.
The Trump Organization issued a statement after the pause, calling the judge's order to cancel the Trumps' business certificates "overzealous."
"Judge Engoron’s order erroneously sought to adjudicate the rights of non-party business entities that employ nearly 1,000 hard-working New Yorkers, have never been accused of any wrongdoing and, were never given their day in court – in clear violation of their fundamental Constitutional rights and Due Process. We will continue to vigorously defend our company and our incredible employees from this politically-motivated persecution," the statement reads.
Appeal
President Trump's attorneys appealed the civil fraud case against him on Oct. 4 and Oct. 5, filing a 1,154-page document in a bid to pause the currently ongoing trial.
"[New York] Supreme Court's Sept. 26 and Oct. 5, 2023 decision impose unauthorized, undemanded, overbroad relief without proper factual or legal predicate, which will result in significant, irreparable harm," states the reason for requesting a stay on the case.
President Trump had already previously sought to delay the trial, and the appeal had been denied just days before the trial began.
New York Supreme Court Justice Arthur Engoron's Sept. 26 decision not only found President Trump liable for fraud, but ordered the dissolution of the Trump Organization and related LLCs, which means the 45th president will lose his entire real estate empire in a matter of days unless the appeal is granted. Furthermore, attorneys argue, hundreds of employees will be affected.
"Supreme Court clearly does not comprehend the scope of the chaos its decision has wrought," the filing reads, describing the summary judgment as a "miscarriage of justice."
Case and Penalties
President Trump's business certificates have already been canceled, and the judge's Oct. 5 order requires him to notify the court before applying for a new one, even outside New York. His sons Eric Trump and Donald Trump Jr., executive vice presidents in the Trump Organization, face similar penalties.
The buildings they stand to lose include Trump Tower, 40 Wall Street, the Seven Springs family estate upstate, and private residences belonging to Eric Trump and Donald Trump Jr.
The case began when President Trump's former attorney Michael Cohen made claims that his boss inflated his net worth. New York Attorney General Letitia James, who declared that she would sue the former president for fraud when she was campaigning for her position, brought forth a civil lawsuit in September 2022 accusing him of defrauding the state by artificially inflating his net worth to get more favorable terms from insurers and banks.
The lawsuit included seven claims, one of which Justice Engoron ruled on about a week before trial, finding President Trump liable for fraud.
The trial began on Oct. 2, during which President Trump made a surprise appearance and spoke with the press at length. He attended again the second day, and stayed part way through the third. The trial will deal with the amount in penalties President Trump owes, as well as proving out the remaining six claims of fraud in the prosecutor's lawsuit.
The appeal itself runs over 30 pages, the remaining 1,000-plus pages being case precedents cited.
Hundreds of Employees Face Job Loss
The latest appeal argues that the court exceeded its jurisdiction and "abused its discretion" in the penalties ordered, pointing out that the prosecutors never sought the dissolution of Trump Organization in its petition.
Ms. James had instead asked for $250 million in penalties, and to bar President Trump and his sons from holding executive business posts in the state for five years. She also did not cite the law that would have enabled the judge to order dissolution as relief, the attorneys argue.
"The consequences of enforcing the MSJ Decision [summary judgment on Sept. 26] are dire, and once done, cannot be undone," the attorneys wrote.
They pointed out that "innocent nonparties and employees who depend on the affected entities for their livelihoods" are being swept up in the "overbroad" ruling. The decision was without process, statutory authority, or trial, and "renders impossible the lawful operation of multiple businesses and threatens termination of hundreds of New York employees without any jurisdiction or due process."
"These non-parties are impacted without finding of any wrongdoing on the part of businesses," they wrote. "Perhaps worst of all, it seeks to impose the corporate death penalty with no statutory authority for such remedy."
When Justice Engoron made the decision, he admitted he did not know what the scope of repercussions would be when attorneys asked what it meant for certain properties like Trump Tower, or Eric Trump's home.
But the Sept. 26 order will take place imminently, the attorneys argue, and the judge's Oct. 5 order did not address any of the questions attorneys had raised. The attorneys also argue they had no opportunity to present their case before the Sept. 26 order.
Statute of Limitations
The attorneys also made additional arguments about the judge extending the statute of limitations during the trial.
A June appeals court decision had defined the statute of limitations to allegations from 2014 onwards. The prosecutors' original lawsuit covered the decade from 2011 to 2021.
During the trial, the judge acknowledged the statute of limitations, but said he would allow evidence from before 2014 if the prosecutors could connect it to later crimes. The prosecutors had argued for bringing in this evidence under the "continuing wrongs doctrine."
In the appeal, President Trump's attorneys argue that the doctrine does not delay or extend the period allowed, citing other court rulings. Furthermore, the court is now treating the individual financial statements as "separately actionable claims," rather than "continuing wrongs," they argued.
If the statute of limitations is applied correctly, the majority of the prosecutor's claims are "subject to dismissal as untimely," the
