A New York appeals court rejected Donald Trump's bid to dismiss state Attorney General Letitia James' lawsuit accusing him and his family business of "staggering" fraud, but narrowed the case and dismissed all claims against Mr Trump's eldest daughter.
Ms James's civil case filed last September accused Mr Trump of lying from 2011 to 2021 about asset values at the Trump Organization, as well as his own net worth, to obtain better terms from lenders and insurers.
The lawsuit seeks at least $250 million (€228m) in damages, and to stop the Trump family from running businesses in New York.
Mr Trump's adult sons Donald Jr and Eric are also defendants.
Mr Trump, the Republican front-runner for the 2024 presidential election, has denied wrong doing. He has also called Ms James' case and two unrelated criminal indictments, where he has pleaded not guilty, part of a Democratic "witch hunt."
In a 5-0 decision, the Appellate Division in Manhattan said state law gave Ms James power to police alleged "repeated or persistent fraud or illegality," and conduct lengthy and complex investigations many years after suspected misconduct began.
But it said statutes of limitations prevented Ms James, who had probed Mr Trump's business dealings for three years, from suing over claims that arose before 13 July 2014, or 6 February 2016, depending on the defendant.
It also said all claims against Mr Trump's daughter Ivanka Trump should be dismissed because Ms James filed them too late.
The court returned the case to Justice Arthur Engoron of the state Supreme Court in Manhattan to determine which parts could proceed. A trial is scheduled for 2 October.
Mr Trump was questioned under oath for the case in April.
"There is a mountain of evidence that shows Mr Trump and the Trump Organization falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for significant economic gain," a spokesperson for Ms James said.
"This decision allows us to hold him accountable for that fraud, and we intend to do so."
Lawyers for the Trumps did not immediately respond to requests for comment.
During oral arguments on 6 June, Mr Trump's lawyer Christopher Kise said Ms James lacked broad authority to "interject" herself into successful, private transactions dating back several years.
Ms James' office countered that the transactions did not occur in a vacuum, and that letting Mr Trump commit fraud hurts honest participants in banking, insurance, and real estate markets.
In the criminal cases, Mr Trump faces a 34-count indictment obtained by Manhattan District Attorney Alvin Bragg over hush money payments to a porn star, and a 38-count US Department of Justice indictment saying he mishandled classified documents.
