Michael Cohen Lawsuit to Make Trump Cover Legal Bills Faces Skeptical Judge

(Bloomberg) -- Michael Cohen's bid to make the Trump Organization pay millions of dollars he owes in legal fees faced skepticism from a New York state judge.

Cohen, once President Donald Trump's personal lawyer, sued the Trump Organization in March, seeking almost $4 million. Cohen said the company initially promised to reimburse him for any legal costs tied to Special Counsel Robert Mueller's investigation and other matters and actually paid some of the bills, until reports emerged that Cohen planned to cooperate with prosecutors and Trump distanced himself.

During a hearing on Tuesday, New York State Supreme Court Justice Joel Cohen asked how an oral agreement to pay his legal bills indefinitely could be valid since it couldn't be enforced within a year, as required by state law.

“There's no way for the agreement to be completed within a year,” the judge said. “It just means the defendant would have to be on guard forever.”

W. Hunter Winstead, an attorney for Cohen, called the oral agreement “sufficiently valid” and said he's seeking additional documents from the Trump Organization to confirm the pact's existence and show it had been written as a binding contract.

“I don't think that's a fishing expedition,” Winstead said, referring to how the Trump Organization described the request.

The company asked the court in April to throw out the lawsuit, claiming there was no contract with Cohen and that the 52-year-old is just hoping to score a “payday.” The judge declined to rule on the request immediately.

‘Ad Infinitum'

Cohen “alleges that a fictitious ‘contract' bound Trump Org. to write him a blank check to cover every conceivable expense ad infinitum,” the company wrote in April. “This essentially says that all legal cases, all legal matters, all fees and costs, without definition, will be covered,” Marc Mukasey, a lawyer for the Trump Organization, said Tuesday.

Cohen pleaded guilty in August 2018 to campaign finance violations and is currently serving a three-year prison sentence in Otisville, New York. Prosecutors said two Trump company executives had approved improper payments to Cohen to ensure that the recipients didn't disclose “alleged affairs with the candidate.”

Cohen admitted to making a $130,000 payment to Stephanie Clifford, the porn star known as Stormy Daniels, and arranging an illegal contribution of $150,000, the same amount former Playmate Karen McDougal got from the National Enquirer's publisher to buy and suppress her story. Trump has denied having affairs with the women.

Federal prosecutors in Manhattan said last month that they had concluded their investigation into whether anyone at the company worked with Cohen to pay hush money, ending a potential legal threat to the president's business and executives close to him. Last week, though, news broke that Manhattan District Attorney Cyrus Vance Jr. has subpoenaed the company to see if any Trump Organization executives filed false business records relating to the payments.

Read more:

• Trump Organization Subpoenaed by Manhattan D.A. Over Hush Money

• Legal Threat to Trump's Company, Executives Over Cohen Ends

• Michael Cohen Is Still Fighting Trump's Company From Prison

The lawsuit is part of a broader war Cohen has fought against the president over his belief that he shouldn't be the only person to have gone to jail over the payments. The legal fees he's seeking also represent a financial lifeline that would boost his ability to maintain a luxury lifestyle his family has grown accustomed to. Cohen and his wife have seen much of their net worth evaporate as their primary source of wealth -- taxi medallions -- has sharply deteriorated.

The case is Cohen v. Trump Organization LLC, 651377/2019, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Heather Smith, Peter Jeffrey

©2019 Bloomberg L.P.