New York appeals court halts the process of breaking up Trump’s businesses but rejects stopping the trial

By Lauren del Valle and Kara Scannell, CNN

(CNN) — A New York appeals court judge on Friday rejected Donald Trump’s attempt to stop the ongoing $250 million civil fraud trial, but temporarily halted the process of breaking up the former president’s businesses.

Associate Justice Peter Moulton issued the ruling after a brief hearing Friday afternoon. It leaves Trump’s empire untouched for at least another month and perhaps offers the former president and his family a glimmer of hope.

Trump sought to put Judge Arthur Engoron’s surprise summary judgment order last week that he is liable for fraud and must cancel business certificates for many of his business entities on hold pending further appeal.

The dissolution of the entities would cause irreparable harm to the businesses and upwards of 1,000 employees, Trump attorney Christopher Kise argued in court.

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

Engoron had ordered Trump to propose potential receivers by October 26, which would begin the process of dissolution.

During the hearing, Moulton speculated that such a broad interpretation of Engoron’s ruling could mean LLCs holding the private homes of Trump and the other defendants could be at risk of being sold.

“[Engoron] clearly does not comprehend the scope of the chaos its decision has wrought,” Trump’s lawyers said in a court filing earlier in the day.

“We’re not seeking delay. We’re not seeking anything but a fair trial and these errors permeate the ongoing trial,” Kise said in court, referring to “an avalanche of errors” in the summary judgment ruling.

Trump’s legal team believes the appellate court could eventually reverse at least part of Engoron’s bombshell order and gut New York Attorney General Letitia James’ case by dismissing a majority of the lawsuit’s claims that they believe are time barred by an earlier appellate ruling handed down in June.

The New York attorney general’s office opposed the request to delay the trial, saying Trump and the other defendants are attempting “to sow chaos by disrupting an ongoing trial that has now been going for a week. Yet defendants fail to point to any purported irreparable harm from proceeding with a trial that has already begun.”

The attorney general’s office also criticized Trump’s team for waiting days into trial testimony to file the stay request.

“And tellingly, they waited until after Mr. Trump decided to stop attending the trial,” the letter says. Trump attended the first three days of the trial and has returned to Florida.

The response also says a delay would be disruptive to the court and its witnesses, creating a “cascade of delays in not only this case but also other litigation involving Mr. Trump.”

“If the trial here is delayed at all, there is a significant risk that defendants will request further delays of trial based on the deadlines in these other cases. Indeed, defendants already appear to be attempting to play one court against the other,” the motion reads.

With regard to Trump’s request to pause Engoron’s summary judgment, the attorney general stressed it has “informed defendants of its willingness to discuss staying enforcement of portions of that relief pending trial and entry of final judgment, provided that the trial continues to move forward.”

Trump and his co-defendants have not yet agreed to engage in those discussions, the attorney general’s filing adds, saying “there should be no resort to the emergency of this Court when the parties have not even had an opportunity to determine if they can reach an agreement.”

The attorney general’s office says the appellate court should consider the significant court resources arranged for the trial, like “special security arrangements outside and inside the courthouse, many additional security and other court personnel to conduct those security arrangements, and special arrangements to ensure access for the press and public.”

Trump’s attorneys agree to drop lawsuit against Engoron

Separately, Trump’s attorneys agreed to drop a lawsuit they filed against Engoron and the New York attorney general.

Trump attorneys and his co-defendants notified the appellate court that they’ve agreed with James’ office to discontinue the suit.

Engoron handed down the summary judgment ruling last week, causing the appellate court to deny Trump’s request for a stay as moot because Engoron ruled as they requested.

This story has been updated with additional developments.

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