President Donald Trump. (Photo: Andrew Harrer/Bloomberg)

Attorneys for President Donald Trump and his family charitable foundation have agreed to a plan to dissolve the Trump Foundation and its assets under the supervision of a state judge, New York Attorney General Barbara Underwood said Tuesday.

The stipulation does not affect the rest of the litigation, which seeks $2.8 million in restitution from the Trump Foundation and to ban Trump and his children from serving on the board of a nonprofit for a number of years.

Under the agreement, the Trump Foundation will have a month to identify a list of nonprofit organizations that will receive an equal distribution of its remaining assets, which were not identified in the stipulation. Underwood's office will be allowed to review the organizations that are chosen to receive those funds and can object to any of those recipients.

“Today's stipulation accomplishes a key piece of the relief sought in our lawsuit earlier this year,” Underwood said in a statement. “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.”

The foundation's dissolution was not unplanned, though the stipulation will expedite the process. Attorneys for the Trump Foundation claim that the organization has been trying to dissolve for more than a year and half now, but that the Charities Bureau of the Attorney General's Office initially denied the request.

“Contrary to the NYAG's misleading statement issued earlier today, the foundation has been seeking to dissolve and distribute its remaining assets to worthwhile charitable causes since Donald Trump's victory in the 2016 presidential election,” said Alan Futerfas, an attorney from Manhattan representing the Trump Foundation. “Unfortunately, the NYAG sought to prevent dissolution for almost two years, thereby depriving those most in need of nearly $1.7 million.”

Manhattan Supreme Court Justice Saliann Scarpulla told both parties in a court appearance earlier this year that such a stipulation would be the best way forward since neither side disagreed about the future of the foundation.

“I don't want to have to resolve an issue that both sides agree will happen and both sides agree should happen and we can move the case along a lot faster,” Scarpulla said. “Why don't you suggest a couple of places, look at them, and so long as they are not outrageous, I'm sure we can agree on a place or two or three or 10 where the remainder of the charitable contributions can be directed. I think that should be out of the case. You can agree to it. Everyone thinks that's where we will end up anyway.”

The dissolution of the foundation was a major piece of New York's lawsuit, which will continue regardless of the foundation's dissolution. Underwood said in a statement that the agreement won't change their strategy moving forward.

“This is an important victory for the rule of law, making clear that there is one set of rules for everyone,” Underwood said. “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.”

The agreement follows a decision last month from Scarpulla to reject a motion to dismiss the lawsuit from the Trump Foundation. Trump's attorneys had made a number of arguments in that motion—including that the president was not subject to the jurisdiction of a state court. Scarpulla rejected that argument, and others, allowing the lawsuit to continue.

Underwood announced the litigation in June after a nearly two-year investigation by the Attorney General's Office into the foundation's activities both during and before the 2016 campaign for president.

There are two major parts of the lawsuit. The first alleges that the Trump Foundation colluded with officials from Trump's presidential campaign to host a televised fundraiser for veterans groups just days before the Iowa caucuses.

Trump had chosen to hold the fundraiser rather than attend a debate between his opponents in the primary. Trump then, allegedly, disbursed the funds raised at the fundraiser immediately after the event and at a handful of campaign events.

Underwood's office is requesting $2.8 million in restitution for the foundation's actions in relation to the event. She's also seeking to ban Trump from leading a nonprofit in New York for the next decade, and is asking for his children to also be temporarily banned from serving on the board of such an organization.

Trump's attorneys alleged that the conduct was not unlawful because he didn't receive any financial benefit from the event or the distribution of funds thereafter. Scarpulla disagreed in the decision, saying the free media Trump gained by holding the fundraiser and a handful of events afterward to distribute the money represented his financial interest in the arrangement.

The second part of the lawsuit alleges that Trump used the foundation to settle a series of self-dealing transactions. Those included a $100,000 payment to settle legal claims against the Mar-a-Lago resort, Trump's golf club in Florida, among other arrangements. The payment was allegedly made to a charitable foundation to settle legal claims with the city of Palm Beach, Florida.

Futerfas has said that all of those payments were either legal or accidental. Scarpulla will decide the merits of those claims in the coming months. Attorneys for the Trump Foundation are scheduled to file a response to the state's lawsuit sometime this month or in early January.

READ MORE:

Manhattan Justice Rejects Motion to Dismiss Trump Foundation Lawsuit

Judge Questions Legality of Trump Campaign's Involvement in Charitable Foundation

Trump Attorneys Claim Political Bias in Effort to Dismiss Trump Foundation Lawsuit