In response to objections raised by New York Attorney General Letitia James, representatives from the firm that posted a $175 million bond for former president Donald Trump have defended the deal, stating that it is adequately secured by Trump's cash reserves. The court filing submitted on Monday sets the stage for a hearing next week, where Justice Arthur Engoron will determine if the bond meets state requirements and allows Trump to appeal a massive civil judgment.

James had expressed concerns about the arrangement, including questions about the licensing of Knight Specialty Insurance Company, owned by billionaire Trump supporter Don Hankey. However, the recent filing asserts that the bond is backed by cash from Trump's Charles Schwab brokerage account, which holds an amount slightly exceeding $175 million. Trump's representatives also argue that Knight is properly licensed to operate in the state, citing a statement from the former superintendent of insurance, Gregory V. Serio.

Alan Garten, the general counsel for the Trump Organization, stated that the filings demonstrate that "Knight is fully authorized to enter into this transaction and the bond is backed 100 percent by cash." However, some experts believe that the filing may not have addressed all of James' concerns about the bond. Adam Pollock, a former New York assistant attorney general, noted that the filing is still overly complicated and could prompt Engoron to scrutinize it further.

Pollock specifically highlighted a document in the filing that referred to a separate company's agreement regarding a $91 million bond in a defamation case. The filing allegedly contains a typo, with an individual involved in the matter acknowledging the mistake and clarifying that it should have referred to Knight Specialty Insurance Company.

Don Hankey, the owner of Knight Specialty Insurance Company, expressed confidence that the court filing would allay James' concerns. Hankey mentioned that he got involved after other bond companies declined to work with Trump, whose attorneys initially sought a bond worth over $450 million—a figure that was later reduced.

Hankey affirmed his decision to provide the bond, stating that it was the right thing to do. While he did not disclose specific details about the fee, Hankey mentioned that it was a modest amount but emphasized that he believed the collateral from Trump made it a good business deal. According to a confidential source, the bond fee was 1 percent, and Trump expected to benefit from earning interest on the $175 million at a rate of approximately 5 percent, making the bond company a worthwhile option.

Under the terms of the agreement, Trump granted Knight a security interest, giving the firm control of the funds and requiring him to replenish the account if it falls below $175 million.

The New York attorney general's office declined to comment on the matter. In February, Justice Engoron ruled that Trump and his business partners owed over $450 million in penalties and interest after submitting inflated financial information to banks and insurers over several years. State law mandated that Trump post a bond amounting to the full judgment to prevent James from initiating collection procedures. Trump's attorneys successfully argued for a reduced bond, citing his inability to secure one for nearly half a billion dollars. Hankey later revealed that discussions had taken place regarding posting the larger bond.

The upcoming hearing will determine if the bond satisfies state requirements and will have significant implications for Trump's ability to appeal the civil judgment and prevent the seizure of his properties by state authorities.