A New York court has overturned a roughly $500mn penalty against Donald Trump in a landmark civil fraud case, ruling that one of the most severe civil penalties in US history was excessive.

Judges at New York’s second-highest appeals court said on Thursday they were vacating a “disgorgement award”, in a case that had centred on allegations that Trump and people connected to him fraudulently inflated the value of real estate assets in representations to banks.

“While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the court’s disgorgement order?.?.?.?is an excessive fine that violates the Eighth Amendment of the United States Constitution,” Justice Peter Moulton wrote in an opinion in which the other judges concurred in whole or part.