Letitia James, the attorney general of New York, set out to prove that Donald J. Trump had committed fraud. Mr. Trump took the stand to assail Ms. James. Lawyers on both sides screamed that their opponents were out of line and wasting time.
When 11 weeks of chaotic courtroom wrangling ended Wednesday, the fate of Mr. Trump’s civil fraud trial began to move behind the scenes and into the hands of Arthur F. Engoron, the unconventional New York judge overseeing the case. And because the judge will decide the verdict — there is no jury — he will determine the future of Mr. Trump’s role in his family business.
Justice Engoron ruled before the trial began that Mr. Trump had fraudulently inflated his net worth, and announced an initial round of punishments. That blow recast the trial as a battle over how steep a penalty the former president would face. Ms. James has indicated that she may press for a fine well above the $250 million she originally sought and will ask the judge to bar Mr. Trump from running a business in the state, banishing him from the world that made him famous decades ago.
The attorney general’s arguments seemed to persuade the judge, and under the powerful New York law underpinning the case, he has broad authority to punish Mr. Trump. His decision is expected as soon as next month, after closing arguments in court.
“The judge has extraordinary powers to fashion a remedy to curtail and punish the misconduct, meaning bad news for Trump,” said Steven M. Cohen, a former top official in the attorney general’s office who is now a founding member of the Blue Raven LLP law firm and teaches corporation law at New York Law School.
Yet Justice Engoron might have already erred when he issued that initial punishment of Mr. Trump, ordering that some of his New York companies be dissolved.
The decision set off a firestorm and appeared to imperil much of Mr. Trump’s New York empire. But interviews with legal experts and a review of court rulings suggest that the judge may have lacked the authority to dissolve the companies.
An appeals court last week granted Mr. Trump’s request to pause the punishment so it could consider Justice Engoron’s ruling. That could presage a more thorough assessment of the judge’s decision-making throughout the trial; Mr. Trump’s lawyers have placed their hopes on an appeal.
“President Trump very much appreciates the court’s consideration and ruling,” Christopher Kise, one of Mr. Trump’s lawyers, said in a statement after the appeals court granted the request, adding that it would help “pave the way for a much needed, and deliberative, review of the trial court’s many errors.”
Alternatively, Justice Engoron could adjust the order himself. If Mr. Trump’s lawyers persuade him, he could use the expected January verdict to change his position before the appeals court has its say.
Al Baker, a spokesman for the court system, said that it would be inappropriate to comment on a continuing case, and referred “to the actions and rulings in this matter which are all part of the public record.” A spokeswoman for Ms. James declined to comment.
The trial is the product of a lawsuit that Ms. James filed last year against Mr. Trump, his adult sons and their family business, accusing them of fudging the value of his assets on years of annual financial statements they provided to banks and other lenders.
Ms. James contended that the statements were so inflated that the Trumps had defrauded the banks. Her case hinged on years of documentary evidence and the testimony of the Trumps themselves, who acknowledged a role in creating the statements.
For its part, the defense called expert witnesses to emphasize that the valuation of real estate is subjective, and that they had found no fraud. The defense also summoned the bankers, who testified that they had done their own analysis of Mr. Trump’s net worth and had concluded it was safe to lend him money — business that was profitable for them.
Despite the trial’s hinging on spreadsheet cells, accounting rules and financial arcana, it took on a distinctly schoolyard atmosphere: Mr. Trump stormed out of the courtroom one day, a witness answered his mobile phone while on the stand, Mr. Kise likened Ms. James’s team to the Kremlin and one of the attorney general’s lawyers snapped at Mr. Kise for issuing “a bunch of ridiculous objections.”
The tension had already boiled over early in the trial, when another of the attorney general’s lawyers demanded that Mr. Trump’s team “be more respectful,” prompting Mr. Kise to reply, “No.”
Justice Engoron presided over the ruckus, often looking like an exasperated parent gently trying to restore order while defusing tension with self-deprecating humor. He dispensed birthday wishes to lawyers and once remarked, “I’m not as dumb as I look.”
Mr. Trump, a Republican, took aim at the judge, who, like Ms. James, is a Democrat. He portrayed them both as members of a left-wing cabal out to derail his latest run for the presidency. In the courtroom, Mr. Kise repeatedly accused the judge of bias. On social media, Mr. Trump took aim at Justice Engoron’s family; court officials later said that numerous antisemitic threats had been made against the judge..
The former president and his defense team also attacked Justice Engoron’s law clerk, landing them in trouble with the judge, who imposed a limited gag order to prevent them from speaking ill of court staff. Mr. Trump twice violated the order, resulting in $15,000 in fines.
Things are now likely to get a lot worse for Mr. Trump. With the courtroom portion of the trial concluding, Justice Engoron, who has appeared sympathetic to Ms. James’s case from the beginning, is poised to impose a sweeping array of punishments.
In addition to the financial penalty, Justice Engoron could institute five-year bans blocking Mr. Trump and his company from striking commercial real estate deals in New York or seeking loans from banks chartered in the state. Most notably, Justice Engoron could permanently bar Mr. Trump from running a company in New York, a move that would essentially erase the former president from much of his company’s operations.
Although Mr. Trump has largely turned the page from business to politics, those punishments would nonetheless constrain his company and be a shameful capstone to his half-century as a New York businessman.
Justice Engoron’s first punishment of Mr. Trump — dissolving some of his New York companies — is less likely to stick.
The order, which came shortly before the trial began, canceled a special type of business certificate that allows some of Mr. Trump’s New York companies to operate using certain names. The punishment would force 10 or so businesses — including Mr. Trump’s New York golf clubs and the entity that manages his hotel overlooking Central Park — to obtain new certificates, a relatively minor headache.
The next line of Justice Engoron’s order went further, referring to the “dissolution of the canceled LLCs,” legalese for the limited liability corporations that control Mr. Trump’s properties. In other words, the judge seemed to be terminating not only the certificates, which can be replaced, but also the actual Trump companies that own or manage his golf resorts, hotel and other assets. For those companies, it appeared to be lights out.
Even Ms. James had not sought that severe a punishment. Under New York law, the experts said, a judge can dissolve an LLC only if one of its members seeks to.
“He’s going beyond what the statute seems to allow,” said David W. Lowden, a lawyer who for decades specialized in commercial transactions and corporate law at Stroock & Stroock & Lavan. Mr. Lowden said that while many observers had predicted that the ruling would crush Mr. Trump’s New York operations, it might ultimately be a simple bureaucratic irritation, resolvable through paperwork.
Other experts noted that the judge’s order applied to all 10 or so of Mr. Trump’s New York companies that have this special type of business certificate, not just the much smaller subset implicated in Ms. James’s complaint. Imposing a punishment on a company not accused of wrongdoing most likely runs afoul of various legal principles, the experts said, and could prompt the appeals court to intervene.
“He may have bought himself an appellate problem and fueled an otherwise dubious claim of bias,” Mr. Cohen said.
But despite the monthslong slog of a trial — and the risk of reversal — Justice Engoron maintained his sense of sarcasm. When Mr. Kise said this week that he wanted to tie up some loose ends for the sake of his appeal, the judge asked, “You’re going to appeal?”