A New York state appellate court ruled on Thursday (August 21, 2025) that Allen Weisselberg, the former chief financial officer of the Trump Organization, no longer needs to repay the $1 million severance he received from the organization to the state of New York.

The ruling, issued by a five-judge panel of the Appellate Division, First Judicial Department of the New York State Supreme Court, was one of three opinions,overturning a previous penalty of more than $500 million imposed on President Donald Trump, his businesses, and other defendants in a civil fraud case. The case was brought by New York State Attorney General Letitia James.

However, the ruling preserved the non-monetary penalties and sanctions determined by Judge Arthur Engoron inhis February 2024 ruling in the case,including lifetime bans on Weisselberg and former Trump Organization controller Jeffrey McConney from serving in financial control roles at New York entities, as CFO Dive reported at the time.

"While the injunctive relief ordered by the court was intended to curb the defendants' business culture, the court's disgorgement order requiring defendants to pay nearly $500 million to the state of New York constitutes an excessive fine, violating the Eighth Amendment of the U.S. Constitution," the appellate court wrote in its ruling.

Weisselberg, a longtime senior employee of the Trump Organization, had his severance agreement repeatedly challenged during the two-and-a-half-month civil fraud trial. According to CFO Dive's reporting at the time, the former CFO was set to receive a$2 million compensation package。

under an agreement that included a clause prohibiting him from disparaging the Trump Organization. In the civil fraud ruling, Engoron found that President Trump, his two eldest sons, and other named defendants committed fraud by inflating the value of certain properties to secure more favorable bank loan terms, and ordered the defendants to paya $464 million penaltyplus interest.

The judge also required Weisselberg to return the $1 million severance he had received at the time, treating the payment as "ill-gotten gains." In the February 2024 ruling, Engoron wrote: "There is abundant evidence that Allen Weisselberg's $2 million separation agreement was intended to compensate him for continuing not to cooperate with any entity that had an 'adverse' legal interest to the defendants." The judge stated that Weisselberg was "a key participant in virtually all of the fraudulent conduct," and allowing him to profit by concealing the defendants' misconduct would be "unfair."

However, Thursday's ruling vacated that requirement, noting that "no evidence supports the Attorney General's claim that 'the severance was partly intended to reward [Weisselberg] for his misconduct and in exchange for his agreement not to cooperate with [the Attorney General's] investigation.'"

"Apart from the lack of record support for the liability finding against Weisselberg (as discussed above), the disgorgement of his severance should also be vacated because there is no evidence of a causal connection between the alleged misconduct and the severance," the opinion stated.

The New York Attorney General's Office said in a statement released Thursday that it would seek an appeal, noting that the appellate court "upheld the trial court's well-supported finding that Donald Trump, his company, and his two children are liable for fraud," James said in the statement.stated。

"The court upheld the injunctive relief we won, limiting Donald Trump and Trump Organization executives' ability to do business in New York. It should not be lost to history: another court ruled that the president violated the law, and our case has merit. We will seek an appeal to the highest court and continue to protect the rights and interests of New Yorkers," the statement said.

The ruling is a "significant victory" for President Trump and his family in the civil case, lifting a "huge financial burden," said Michael Bachner, a partner at Bachner & Associates, in an email response to CFO Dive.

Bachner said that regarding Weisselberg, while the ruling removes the disgorgement requirement for his severance, it does not affect his criminal case. Bachner, a former assistant district attorney at the New York County District Attorney's Office, is not involved in this case.

However, the court "did not overturn the finding that fraud occurred, which could have devastating implications for the Trump Organization," Bachner said.

"These aspects of the court's ruling will be appealed to the New York Court of Appeals, the state's highest court," he said. "It cannot be ruled out that the court could overturn the fraud finding."