New York AG asks court to block any Trump asset transfer to new company

New York Attorney General Letitia James is seeking a court order to block former President Donald Trump's business from transferring assets to a newly-formed company to avoid possible penalties related to a $250 million civil fraud lawsuit brought by the attorney general. 

James asserted Thursday in a new court filing that the Trump Organization "appears to be taking steps to restructure its business to avoid existing responsibilities," referring to the creation of a separate company incorporated last month in Delaware.

The new entity, Trump Organization II, was later registered in New York on Sept. 21, the same day that the attorney general accused Trump and his adult children in a massive fraud, alleging that the former president "falsely inflated his wealth by billions of dollars" to enrich himself and his family.

The extraordinary lawsuit, in addition to seeking $250 million in penalties, also called for a permanent ban on the Trumps from running businesses in New York; and attempts to block Trump and the Trump Organization from purchasing commercial real estate in New York for five years. 

James said the Trump Organization has offered "no assurances" when concerns were first raised that the company "may be seeking to move assets out of state."

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"On the eve of this filing, (Trump's) counsel did offer to provide assurances and advance notice to address what were described as 'purported concerns,' but again offered no concrete mechanism to either effectuate or enforce that offer," the court documents state.

James said the injunction was necessary, in part, to "prevent the continuation of the fraudulent valuation scheme and preserve the status quo...pending trial."

James’ new allegations intensified a legal struggle over the judge who will preside over the case.

Alina Habba, a lawyer for Trump, argued Thursday that James’ latest filing seeks to involve Justice Arthur F. Engoron, who is currently assigned to the case, before a Trump challenge to that assignment has been decided.

The Attorney General’s office has argued that Engoron should oversee the lawsuit because he handled a previous, related case and became familiar with the allegations against Trump. That case was a dispute over whether Trump had complied fully with document demands by James’ office during an investigation before the lawsuit was filed. Engoron ruled in James’ favor that Trump had not, issued a contempt order and fined Trump $110,000 for non-compliance. He later lifted the contempt order.

Trump’s legal team has argued the judge assignment should go to the court’s Commercial Division, which was formed for complex corporate cases like the one against Trump, his family and his business. Likening James’ opposition to judge-shopping, Trump’s lawyers previously asked Justice Adam Silvera, the top administrator for New York County Supreme Court, to decide the assignment question.

In a Thursday letter to Silvera, Habba wrote that James’ request “has no merit and is dead on arrival for a number of reasons,” and “underscores why the action should be assigned to the Commercial Division.”

Trump's legal team has denied any wrongdoing and further cast the new filing as a political stunt.

"We have repeatedly provided assurance, in writing, that the Trump Organization has no intention of doing anything improper," Habba said.