I'm not a lawyer, but it feels like the appellant judges are bringing to the fore exactly what a lot of Trump's more knowledgeable defenders have been pointing out. Namely that:
a. The banks who did the deal are not claiming to be defrauded and,
b. Probably more importantly, the banks are "sophisticated" parties who had the power to do their own audit and either agree, or disagree and set their own valuation.
First off, I should preface this by saying I haven't read the briefs of either party, and don't practice in NY. That being said:
I don't think the appeals court will reverse on an issue of fact. If a judge or jury found fraud as a matter of fact, then that won't get appealed unless it's truly egregious. And by that I mean, no person could reasonably find X because there was truly no evidence of X presented at trial.
These two arguments by trump, don't meet that burden. First off, the bank is most certainly claiming fraud. They refuse to do business or loan any more money to trump. What his defense did, was drag in an employee or two who job at the bank was not to manage risk or approve the terms of loans. They were charged with landing whales. Trump was a whale, they got his business. So they claim they still would go for it, but they don't speak for the bank.
There no reason to apply this logic to the loan department. That's a pure math game where some nerd crunches numbers and then draws up the terms to manage the risk of the loan. In this case, the size of the loan was greater than the value of the asset requesting the loan. No way the terms stay the same if the bank wasn't lied to.
As someone who is much more familiar with the law, are you saying that argument is without any merit? If so, are you stating outright that the appellant judges are asking the questions to round out the argument, but are likely to rule against the appeal? Or are you stating that it's a sound argument but open to interpretation and, so, may go either way (which is an entirely different sentiment, in my estimation).
I'm just saying that, in my experience, it's hard to read which way a judge is leaning just off their line of questioning. Maybe that's the case with some judges, and I'm not familiar with this bunch. But I feel that good judges just use pointed questions to knock out the bullshit and have the parties present a narrow legal argument towards the actual point on appeal.
For example, in a case where the issue on appeal was whether or not the Fed violated the 5th Amendment when seizing property, a judge may ask questions just around the "notice," requirement. I'd say the judge might be tipping his hat by suggesting that this is the singular issue he doesn't feel is adequately defined by the case law the parties are citing. So he's trying to push the sides to sway him on the only point he feels matters.
c. As somewhat of a sidenote, the judges have also brought up one other primary criticism of ruling that has been voiced which is that this sort of thing hasn't been prosecuted in this sort of way in the past (and may even be fairly common practice, if Kevin O'Leary is to be trusted). This rings true, as well, as I certainly know of people who have taken out loans on their homes and have attempted to value their home as high as possible to maximize their loan. All I've ever heard to happen in those cases is that the bank declines and sets it's own value; I've never heard of them being brought up on fraud charges. In fact, I'd never even considered that something like that could be characterized as fraud.
I get that, but feel that trump went quite beyond just an exaggerated valuation. I think they'd let that slide if it was reasonable. But I just can't get there with this.
To take just one example of fraud: The State argued that Mar-a-Lago should be valued as a Golf Course in Florida at such and such acres with such and such property on it. Trump valued the property as if he built several mansions on the property and then proceeded to sell them at the absolute highest value (I think he claimed like $200million per house.)
The problem with that is twofold: 1) The houses don't exist. And 2) they can never exist on that property, because it's not zoned as such. It's zoned as protected land. Trump even signed an agreement that he would not alter the property. It has to stay a golf course/resort. Trump even petitioned them to change the zoning, and it was denied. So there was no chance it was gonna be used as a neighborhood with the uber-rich buying top of the line mansions.
It would be like in your scenario, rather than just exaggerate the size or condition of a single-family residence, your neighbor instead valued his property as if he had a 30-story 200-unit apartment complex, when there's no way he could ever build that on his property.
And to take another example: Trump straight up tripled the size of his penthouse apartment in trump plaza. Said it was 30,000sq ft when it was closer to 10,000. The State pointed out that you have apps you can use on an Iphone that can tell you the square footage of a place just by using the phones camera, and will be like 95% accurate. Hell, just a layman can look at something and tell the difference between 30K and 10k sq. ft.
That's not an honest mistake. That's just straight fraud.