New York City — Donald J. Trump's sprawling web of businesses in New York faces grave danger and could unravel swiftly after this week's fraud ruling by a state Supreme Court judge, legal and business experts say.

The summary judgment issued Tuesday concluded that the former president and his associates, including sons Donald Trump Jr. and Eric Trump, systematically overvalued corporate assets over a period of years.

In one instance, they falsely inflated the total square footage of a commercial building by 300 percent, the ruling concluded. They also valued rent-controlled apartments equally with buildings where landlords are free to set their own prices.

"That is a fantasy world," Judge Arthur Engoron wrote, "not the real world."

Trump's business operations have faced serious legal setbacks many times before.

In 2017, while serving in the White House, Trump agreed to pay $25 million to settle fraud allegations linked to a project he called "Trump University." In 2019, he agreed to pay $2 million to settle charges that he illegally diverted charitable funds to pay for his political operations.

Trump's company was found guilty last December of 17 counts of criminal tax fraud and falsifying business records.

While the judge's decision on Tuesday doesn't end the legal wrangling in this civil case, experts interviewed by NPR agreed that it poses unprecedented danger to Trump's businesses.

Trump could be forced to liquidte assets

That's because as part of this summary judgment, Engoron cancelled certificates that allow many of Trump's companies to operate under New York state law.

He also ordered the naming of independent receivers who will "manage the dissolution" of limited liability corporations that hold many of Trump's most prized assets.

Those holdings including 40 Wall Street, also known as the Trump Building, and Trump Tower.

"[Trump] is greatly at risk," said John Coffey, a professor at Columbia University's law school who also directs the university's Center on Corporate Governance.

According to Coffey, there is still significant uncertainty about what will happen next. Engoron has signaled he will clarify his ruling at a future hearing, and a fraud trial is set for next week in his Manhattan courtroom.

One immediate possibility is that Trump could be forced to liquidate "assets that he made his reputation on and very much cherishes," Coffey said.

Experts told NPR the legal threat to Trump now comes in three distinct forms.

• First, Trump's entire New York business operation, now deemed fraudulent, could be turned over to a receiver who would effectively take control of the firms and liquidate them at a public auction.
• Second, Trump and other defendants could be required to pay a $250 million fine, the amount New York Attorney General James sought in her original complaint filed last year. The amount is large enough that experts say it could force Trump to sell assets.
• Third, James could permanently ban Trump and his associates, including Donald Trump Jr. and Eric Trump, from doing business in New York state, where many of the family's most significant assets are located.

A ruling that empowers New York's attorney general

Indeed, in ruling that Trump's businesses operated in a fraudulent manner, Judge Engoron cited a New York state law that grants sweeping powers to James over the future of Trump's enterprises in New York.

"It's a New York statute that's specifically designed for the [state] attorney general to police bad business behavior," said Will Thomas, assistant professor of business law at the University of Michigan.

"It's not about 'do you owe money or damages or anything like that,' " Thomas said. It's 'we think you're operating a deceptive or fraudulent business in New York and we're going to give the attorney general the power to take away your licenses.' "

This outcome alone poses grave risks for Trump. He has long portrayed James, a Democrat who is Black, as a political arch-nemesis and part of a partisan witch-hunt against him.

Writing this week on his social media site, Trump once again leaned on race-tinged language to criticize New York's top law enforcement official, describing her as "racist" and calling her Letitia "Peekaboo" James.

"She even quickly convinced a Trump Hating Judge that my assets were valued too high," he complained in a post on Truth Social, adding, "THIS IS A NEW YORK POLITICAL SCAM!"

But unless this ruling is overturned on appeal, or modified, James will now hold sweeping authority over Trump's financial operations.

What happens next

Trump and his team of attorneys have promised to challenge Judge Engoron's decision, but their past legal efforts have often been rejected by state and federal courts.

"What we've seen with Donald Trump over and over again is that often arguments that gain traction with his supporters are flatly inconsistent with the law," said Thomas of the University of Michigan.

One of Trump's claims has been that he played by the same rough-and-tumble, buyer-beware accounting rules that shape much of New York City's real estate industry.

"Most of the time that's just not going to be much of a winner of an argument," said Thomas. "Telling a police officer, 'I know I was speeding but so was everyone else' — that doesn't get you off the hook."

In his ruling, Engoron blasted Trump's legal arguments as "absurd."

On Thursday, meanwhile, Trump's team lost another appeal, aimed at dismissing many of the fraud allegations against him and intended to delayed next week's trial.

The trial in Engorom's Manhattan courtroom, expected to begin as early as Monday, will establish whether Trump and his associates violated other New York state laws and whether his companies will pay a sizable fine for fraudulent behavior.

It's also expected to answer many remaining questions about the future of the Trump family's New York state enterprises.