A New York state appeals court on Thursday vacated the $464 million civil-fraud penalty imposed on President Donald Trump, ruling that the nearly half-billion-dollar disgorgement order was “an excessive fine” barred by the U.S. Constitution. The decision removes a major financial threat that had stemmed from Judge Arthur Engoron’s February 2024 judgment finding Trump and the Trump Organization inflated asset values to win favorable loan and insurance terms. In a split opinion, the five-judge panel of the Appellate Division, First Department, upheld Engoron’s finding of fraud but struck down the monetary sanction. “The disgorgement order, which directs that defendants pay nearly half a billion dollars to the State of New York, is an excessive fine that violates the Eighth Amendment,” Judges Dianne T. Renwick and Peter H. Moulton wrote for the majority. Engoron’s non-financial remedies—including temporary limits on Trump and his two eldest sons serving as corporate officers—remain intact. Trump had posted a $175 million bond while pursuing the appeal; that security can now be released unless the ruling is stayed. Attorney General Letitia James said her office is reviewing the decision and may ask the state’s highest tribunal, the Court of Appeals, to reinstate the penalty, potentially prolonging the dispute over New York’s business-fraud statute. The civil case is one of several legal battles the president faces as he begins a second term. He is also appealing a criminal hush-money conviction and separate defamation judgments, underscoring the continuing legal risks even after Thursday’s financial reprieve.