Attorney General Letitia James had accused the defendants in September of inflating Trump's assets by billions of dollars in a decade of lies to banks and insurers, in what she called a "staggering" fraud.
Justice Arthur Engoron of the state Supreme Court in Manhattan rejected defense claims that James waited too long to sue, fell short of establishing her fraud claims, and should have provided calculations for the $250 million of damages she is seeking.
Lawyers for Trump did not immediately respond to requests for comment.
In a statement, James said her probe found that Trump "engaged in years of extensive financial fraud to enrich himself and cheat the system," and the decision makes clear that he must defend himself in court.
(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot)
