Trump’s Bid to Stay NY Fraud Trial Fails, but Receives Reprieve on Business Certificate Cancellation

A New York appeals court on Friday refused to stay the ongoing civil business fraud trial of Donald Trump and his company, but did halt a judge’s order to cancel the business certificates of Trump’s companies in the state.

The ruling came after Trump’s business fraud trial ended its first week of proceedings in Manhattan Supreme Court.

New York Attorney General Letitia James had opposed halting Trump’s trial pending his appeal of a judge’s pre-trial ruling that he was liable for business fraud in the case. But she did not oppose Trump’s request that the judge’s related ruling, which canceled an array of corporate business certificates, be stayed pending the outcome of the appeal.

James’ office said in a statement that the company certificates hadn’t been canceled yet and the AG’s office proposed putting someone in place to oversee that process, with possible names due later this month.

The ongoing trial is dealing with James’s $250 million lawsuit against Trump, the Trump Organization, his two adult sons, and top company executives.

Christopher Kise, Trump’s lawyer, in a statement, said, “We are very pleased the First Department upheld New York law and put a halt to any cancellation of business certificates, receivers or dissolution. The trial court’s attempt to reach issues, entities and assets beyond the scope of this case has been suspended.”

“Unsurprisingly, he is twisting this ruling and falsely claiming victory for a resolution we proposed,” James said in a statement. “The truth is simple: a judge ruled that he committed repeated and persistent fraud, and we will continue to demonstrate that in court.”

Manhattan Supreme Court Judge Arthur Engoron issued a summary judgment last month which found James had proven her central claim that the defendants had committed business fraud. Engoron had canceled the business certificates of Trump’s companies as part of that finding.

The trial is dealing with the remaining six claims in the suit.

Friday’s ruling staying the cancellations but allowing the trial to resume came from a justice in the appellate division that handles cases arising out of Manhattan Supreme Court.

— CNBC’s Kevin Breuninger contributed to this report

A pivotal moment unfolded in the New York appeals court, as it refused to halt the civil business fraud trial involving Donald Trump and his company. While the trial proceeds, the court did, however, grant a stay on a judge’s order to cancel Trump’s company’s business certificates in the state.

This ruling emerged after the completion of the first week of proceedings in the Manhattan Supreme Court.

New York Attorney General Letitia James vigorously opposed postponing Trump’s trial pending an appeal of the judge’s pre-trial ruling that held him responsible for business fraud. However, she did not oppose Trump’s request to suspend the related ruling, which revoked various corporate business certificates, until the appeal’s outcome.

Responding to the situation, James’ office clarified that the company certificates had not been canceled yet. Her office proposed appointing someone to oversee the process, with potential candidates to be announced later this month.

The ongoing trial centers around James’s $250 million lawsuit against Trump, the Trump Organization, his two adult sons, and high-level company executives.

Christopher Kise, Trump’s lawyer, expressed satisfaction at the First Department’s upholding of New York law, preventing the cancellation of business certificates, receivers, or dissolution. He also criticized the trial court for delving beyond the scope of the case into additional issues, entities, and assets, which has now been suspended.

“Predictably, Trump distorts this ruling and falsely claims victory for a resolution we proposed,” James countered. “The reality is straightforward: a judge ruled that he engaged in repeated and persistent fraud, and we will continue to demonstrate this in the court of law.”

Last month, Manhattan Supreme Court Judge Arthur Engoron issued a summary judgment in which he found that James had successfully substantiated her core claim that the defendants had committed business fraud. As part of that finding, Engoron canceled Trump’s company’s business certificates.

The trial focuses on the remaining six claims in the lawsuit.

The recent ruling, which stayed the cancellations while allowing the trial to proceed, was made by a justice in the appellate division responsible for cases originating in the Manhattan Supreme Court.

— CNBC’s Kevin Breuninger contributed to this report