Trump Faces Potential Bankruptcy Amid Defamation Case Damages
Donald Trump’s ongoing defamation case, filed by journalist E. Jean Carroll, could potentially lead to bankruptcy, according to legal experts speaking with Newsweek. This situation is exacerbated by the possibility of substantial damages from his civil fraud trial.
Carroll, who accused Trump of sexual abuse and defamation, was awarded $5 million in damages in May 2023. Trump, who has denied the allegations, faces further legal challenges as Carroll’s lawyers seek an additional $10 million in compensatory damages, plus more for Trump’s continued denials.
Legal opinions suggest the financial repercussions could be severe. Former Department of Justice litigator Gene Rossi stated that the damages might be substantial enough to force Trump into bankruptcy. Matthew Mangino, a former district attorney, echoed this sentiment, indicating the judgment could reach nine figures.
Trump’s financial situation, with a net worth estimated by Forbes to be around $2.6 billion, comes under scrutiny amidst these legal battles. His case with New York Attorney General Letitia James over alleged fraud at The Trump Organization adds to the financial pressure.
Ciara Torres-Spelliscy, an associate professor of law, highlighted that the combination of the fraud case and the Carroll lawsuit could push Trump towards bankruptcy, a move that would reveal his debts and creditors. However, she noted that Trump might be reluctant to file for bankruptcy during an election year.
Attorney Bradley Moss, while acknowledging the issue is outside his expertise, expressed doubt that the case would lead to Trump’s bankruptcy, citing his significant assets.
For context, the article references the largest-ever out-of-court defamation settlement by Fox Corporation and the substantial compensatory and punitive damages ordered against Infowars founder Alex Jones.
The possibility of Trump choosing bankruptcy is also explored. Bankruptcy could provide a strategic avenue for Trump to avoid debt repayment while formulating a financial strategy, although it may adversely impact his credit rating.
