The New York attorney general’s office and representatives for Donald J. Trump agreed in court on Monday to slightly modify the terms of a $175 million bond posted by the former president in his civil fraud case after the state questioned the qualifications of the company that provided it and sought to have it rejected.
The deal will keep the bond largely unchanged, with the $175 million in cash that Mr. Trump deposited as collateral remaining in a money-market account, while adding new terms stipulating that the $175 million must remain as cash, and not be transferred into mutual funds, for example. The two sides also agreed to give the California firm that provided the bond, Knight Specialty Insurance Company, exclusive control over the money-market account.
The dispute over the bond was overshadowed on Monday by the start of Mr. Trump’s criminal trial in another Lower Manhattan courthouse a few blocks away. And in the end, the argument was resolved without much drama, the latest development in a civil fraud case against Mr. Trump and his family business that resulted in a $454 million judgment imposed on the former president.
The attorney general, Letitia James, accused Mr. Trump in the civil case of fraudulently inflating his net worth. After a monthslong trial last year, the judge in the case, Arthur F. Engoron, agreed and imposed the massive penalty. But subsequently, an appeals court lowered the judgment to $175 million while it considered Mr. Trump’s appeal of the ruling.
Knight provided the bond — which is a legal document, not an actual transfer of money — this month, essentially promising New York’s court system that it will cover $175 million of the judgment against Mr. Trump if he loses his appeal and fails to pay. In return, Mr. Trump paid a fee to Knight, and pledged a significant amount of cash as collateral.
The attorney general’s office raised questions about the bond, noting that Knight, which is owned by a subprime loan billionaire, had never provided such a court bond in its history, and asked Justice Engoron to reject it and require Mr. Trump to secure a new one. But in a hearing on Monday, prosecutors from the office struck a different tone and offered tweaks to the existing bond terms that they said would satisfy their concerns.
Andrew Amer, one of the attorney general’s lawyers, told Justice Engoron that the state wanted to strengthen the controls around the cash collateral so that it could not be moved or invested in such a way that it could lose value.
Lawyers for Mr. Trump said that because of interest, the $175 million had grown by $712,000.
Christopher Kise, one of the former president’s lawyers, said in court that the concerns raised about the bond were irrational and overblown, pointing out that it was supported entirely by cash. Yet Mr. Kise agreed on Monday with the proposal offered by the attorney general’s office.
“There is no trick, no games, no trapdoor,” Mr. Kise said about the bond and cash collateral. “It is $175 million in a bank account. It is safe. It is secure.”