NEW YORK (AP) — Former President Donald Trump’s company can’t avoid an independent monitor’s oversight while it appeals a court’s decision to require an outside watchdog, a New York appellate court judge ruled Wednesday.
Angela Mazzarelli, an associate justice on the state’s mid-level appeals court, rejected the Trump Organization’s request for a stay — a legal mechanism that would’ve halted the monitoring requirement while it pursues an appeal.
Mazzarelli said a full panel of appellate judges would take up the issue at a hearing on Nov. 28.
In the meantime, Manhattan Judge Arthur Engoron is free to appoint a monitor and put that person to work keeping tabs on Trump’s vast real estate empire, restricting the company’s ability to freely make deals, sell assets and change its corporate structure. Engoron has indicated he could select a monitor as early as next week.
Lawyers for the Trump Organization filed paperwork Monday challenging Engoron’s decision last week to appoint an independent monitor to oversee the company’s business dealings — oversight sought by the New York attorney general’s office as it sued Trump and his company for fraud.
Trump Organization lawyers argue that Engoron overstepped his bounds and that his decision to appoint a monitor for the duration of Attorney General Letitia James’ civil case put “immediate and unlawful prejudgment restraint” on what they said was nearly $5 billion in assets.
Messages seeking comment were left with the company’s lawyers.
Engoron set a Thursday deadline for lawyers from James’ office and the Trump Organization to each submit a list of up to three monitor candidates. After that, Engoron said, the parties will have five days to comment on the other side’s candidates before he makes his choice.
Mazzarelli issued her ruling after an emergency hearing Wednesday where she heard arguments from lawyers for the company and James’ office.
James’ lawsuit, the product of a three-year investigation, alleges Trump and the Trump Organization misled banks and others about the value of prized assets, including golf courses and hotels bearing his name.
James, a Democrat, is seeking $250 million and a permanent ban on Trump, a Republican, doing business in the state.
James’ office sought an independent monitor after it said it found evidence that showed the company was taking steps to dodge potential penalties from the lawsuit, such as incorporating a new, similarly named entity — Trump Organization LLC — in September, just before the lawsuit was filed.
Engoron barred the Trump Organization from selling or transferring any noncash assets without giving the court and James’ office 14 days notice. The to-be-named monitor will be charged with ensuring the company’s compliance and will immediately report any violations to the court and lawyers for both sides.
The Trump Organization also must grant the monitor access to its financial statements, asset valuations and other disclosures, must provide a full and accurate description of the company’s structure and must give the monitor at least 30 days notice of any potential restructuring, refinancing or asset sales, Engoron said.
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