NEW YORK CITY (WABC) -- The Trump Foundation will dissolve itself under judicial supervision as part of a lawsuit filed in New York, the state attorney general announced Tuesday.
The move follows a court decision in favor of AG Barbara Underwood, with the Trump Foundation signing a stipulation to dissolve with review and approval by Underwood of proposed recipient charities of the Foundation's remaining assets.
A court decision last month allowed Underwood's lawsuit, which remains ongoing, to move forward. It also seeks millions in restitution and penalties and a bar on President Donald Trump and his three eldest children from serving on the boards of other New York charities.
Underwood released the following statement:
"Our petition detailed a shocking pattern of illegality involving the Trump Foundation, including unlawful coordination with the Trump presidential campaign, repeated and willful self-dealing, and much more. This amounted to the Trump Foundation functioning as little more than a checkbook to serve Mr. Trump's business and political interests. Today's stipulation accomplishes a key piece of the relief sought in our lawsuit earlier this year. Under the terms, the Trump Foundation can only dissolve under judicial supervision - and it can only distribute its remaining charitable assets to reputable organizations approved by my office. This is an important victory for the rule of law, making clear that there is one set of rules for everyone. We'll continue to move our suit forward to ensure that the Trump Foundation and its directors are held to account for their clear and repeated violations of state and federal law."
Lawyers for the foundation have said any infractions were minor.
Trump had long pledged to dissolve the foundation and donate its funds to charity, but his lawyers said they were thwarted by the attorney general's office, which wanted oversight over the process. Trump Foundation lawyer Alan Futerfas said the three-decade-old foundation has been looking to fold since Trump got elected in 2016.
Futerfas said that the attorney general's office was giving a misleading account of what led to the charity's dissolution in a "further attempt to politicize this matter" and that the state's resistance was "depriving those most in need of nearly $1.7 million."
He said the foundation has distributed approximately $19 million over the past decade, including $8.25 million of the president's own money, to hundreds of charitable organizations.
Tuesday's agreement was reached after a New York judge last month rejected arguments from the foundation's lawyers that the lawsuit was politically motivated and should be thrown out.
Once the judge approves the deal to dissolve the charity, the two sides will have 30 days to provide her with a list of nonprofit organizations that should get the remaining funds. Each charity will get the same amount, and the attorney general's office will have the right to reject ones it deems unfit to receive funds.
Underwood filed the lawsuit against the Trump Foundation after taking over for fellow Democrat Eric Schneiderman, who resigned in May amid allegations he physically abused women.
Schneiderman started investigating the foundation in 2016 and ordered it to stop fundraising in New York after The Washington Post reported that some of its spending personally benefited the presidential candidate.
Underwood referred the office's findings to the IRS and the Federal Election Commission. Those agencies have not commented on the matter.
Underwood alleged that Trump used the foundation to help bolster his campaign by giving out big grants of other's people money to veterans' organizations during the run-up to the Iowa caucuses, the first presidential nominating contest of 2016.
Trump was also accused of directing that $100,000 in foundation money be used to settle legal claims over an 80-foot flagpole he had built at his Mar-a-Lago resort in Palm Beach, Florida, instead of paying the expense out of his own pocket.
The foundation also paid $158,000 to resolve a lawsuit over a prize for a hole-in-one contest at a Trump-owned golf course; $10,000 to buy a 6-foot (1.8-meter) portrait of Trump at a charity auction; and $5,000 for ads promoting Trump's hotels in the programs for charitable events.
(The Associated Press contributed to this report)
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Trump Foundation to dissolve, donate assets amid New York lawsuit