The conviction of Donald J. Trump’s family business on Tuesday represented a devastating blow to the former president, exposing what prosecutors called a “culture of fraud and deception” at his company and providing his political rivals with ammunition as he embarks on a third presidential campaign.
The Trump Organization itself, however, faces a much milder threat.
The maximum penalty the company could pay is $1.62 million, a drop in the bucket for the Trump Organization, which often raked in hundreds of millions of dollars in revenue per year during his presidency. The company has spent more money paying its lawyers to fight the case.
The size of the potential punishment underscores that while the tax fraud conviction has forever tarred the Trump Organization’s name — and branded it a felonious enterprise — the company is facing far less than a financial death sentence. And it helps explains why the company was unwilling to plead guilty.
The Trump Organization resisted a deal even after its long-serving chief financial officer, Allen H. Weisselberg, agreed to plead guilty and testify at the company’s trial, which was focused on off-the-books luxury perks that the company doled out to some of its executives.
The Manhattan district attorney’s office did not accuse Mr. Trump, or anyone in his family, of taking part in the scheme, though prosecutors named the former president and his adult children liberally at trial. In their closing arguments, they used a single exhibit to try to convince jurors that Mr. Trump had approved of the scheme.
Although the Trump Organization has maintained its innocence — and Mr. Trump has chalked up the case to a politically motivated witch hunt by the district attorney, Alvin L. Bragg — the company might have been more willing to strike a deal if it had been facing a harsher punishment.
It is unclear what changes Mr. Trump might make to the company in the wake of the verdict. The Trump Organization is a collection of more than 500 corporate entities, only two of which were on trial.
It is possible that he could shutter those corporations — the Trump Corporation and the Trump Payroll Corp. — without much effort.
A company, of course, cannot be imprisoned, and the two convicted Trump corporations are not publicly traded. As such, there are no financial regulators to punish them or public investors to flee from them.
The Trump Corporation and the Trump Payroll Corp. are also not central to Mr. Trump’s moneymaking enterprise.They largely perform back-office functions, employing and paying top executives, so they do not hold any loans, liquor licenses or other privileges that might slip away in the wake of the conviction.
That’s not to say that the reputational harm from the conviction won’t inflict some damage. It could scare off potential lenders and business partners, or enable them to impose stricter terms on Mr. Trump. And the toll from being a felon could make it harder to retain employees and, eventually, to expand the company.
Yet the Trump Organization was in retreat long before its conviction.
Midway through the polarizing Trump presidency, it shelved plans for new hotel brands and lost some of its signature hotels. In the span of a year, the Trump name was removed from hotels in Panama, Toronto and Lower Manhattan. And rather than tackle new projects, the company opted to tend to properties it has held for years, including office and apartment buildings in New York, a handful of hotels and 16 golf courses that it owns or manages.
The Trump family — which had already adopted several self-imposed ethics restrictions, including a moratorium on new foreign deals — blamed much of the retrenchment on waves of political and legal scrutiny trailing the businessman president.
And that was before the Manhattan district attorney’s office even started examining Mr. Trump in 2018, or the New York attorney general’s office began its own investigation of his business practices the following year.
The attorney general, Letitia James, struck first. In September, she sued the company, along with Mr. Trump, accusing it of overvaluing its assets by billions of dollars. Her lawsuit asks a judge to oust the Trumps from leading their family business; already, an independent monitor has been chosen to ensure that the company does not transfer any of its assets out of state.
And with the company now convicted, any plans for growth appear to be in flux.
In the middle of the trial, the Trump Organization announced a new deal with a Saudi-based real estate company to license its name to a housing and golf complex that will be built in Oman. But the deal appeared to be a one-off, rather than a sign that Mr. Trump was suddenly back in deal-making mode.
The company might also have a changing of the guard in its executive ranks. Mr. Weisselberg is currently on paid leave from the company and it’s unclear whether he will continue to work there after the trial. His lawyer, Nicholas A. Gravante Jr., issued a statement saying that Mr. Weisselberg’s “only obligation relating to the trial was that he testify truthfully, and clearly he did.”
The Trump Organization’s brand also faces deeper reputational problems, much of them stemming from the Trump presidency. The problems intensified in the wake of the Jan. 6, 2021, attack on the Capitol by his supporters, after which banks and insurers fled the company.
It was a far cry from the period leading up to Mr. Trump’s presidency, during which the company opened five-star hotels in Chicago and Las Vegas, bought golf courses and licensed the Trump name to properties around the world that other companies developed.
In the final stretch of the 2016 presidential campaign, Mr. Trump opened a hotel in Washington, just down Pennsylvania Avenue from the White House. It soon became the center of the MAGA universe.
This year, in a sign of the company’s broader retreat, the Trumps sold it.