Rudy Giuliani’s creditors, including two former Georgia election workers who secured a $148 million defamation judgment against him, are challenging his attempt to convert his bankruptcy into a liquidation. They argue that Giuliani has been flouting bankruptcy laws and suggest they may request the case be dismissed altogether.
During a status hearing on Zoom before U.S. Bankruptcy Judge Sean Lane in White Plains, New York, the former New York mayor and Donald Trump adviser faced accusations from Philip Dublin, a lawyer for a committee of Giuliani’s creditors, and Rachel Strickland, an attorney for the election workers, Ruby Freeman and her daughter, Wandrea “Shaye” Moss. They accused Giuliani of failing to provide financial documents, ignoring court orders, and employing litigation tactics to delay the process. They indicated they would likely ask for the bankruptcy case to be dismissed at a hearing scheduled for July 10.
“Our view is we do not have a good-faith debtor. He has misbehaved every step of the way,” Dublin said. “We think again that the debtor here has been trying to game the system.” Strickland added, “For the last six months, my clients and the committee have been sounding alarm bells about Mr. Giuliani’s problematic conduct including his underhanded litigation tactics. … We think that the conversion request (to liquidation) just underscores the bad-faith approach, and don’t think that this is a party that should be allowed to exploit the bankruptcy process any longer.”
Giuliani’s bankruptcy lawyer, Gary Fischoff, did not directly address these allegations in court and did not immediately return a message seeking comment after the hearing. He told the judge that Giuliani has the right to convert the case to a Chapter 7 liquidation. If the case is converted to a liquidation, a trustee would be appointed to take control of Giuliani’s assets and sell many of them off to help pay creditors. If dismissed, Freeman and Moss could pursue their effort to collect on the $148 million award back in the court in Washington, D.C., where they won their lawsuit, avoiding additional legal fees for bankruptcy court.
Freeman and Moss have a pending request before the judge to declare that the $148 million judgment cannot be discharged during Giuliani’s bankruptcy. The bankruptcy is part of a broader legal quagmire for Giuliani. On Tuesday, he was disbarred as an attorney in New York after a court found that he repeatedly made false statements about Trump’s 2020 election loss. Giuliani is also facing the possibility of losing his law license in Washington, with a board recommending disbarment in May, though a court has the final say.
In Georgia and Arizona, Giuliani faces criminal charges over his role in efforts to overturn the 2020 election. He has pleaded not guilty in both cases. When he filed for bankruptcy, Giuliani listed nearly $153 million in existing or potential debts, including almost $1 million in state and federal tax liabilities, money owed to lawyers, and many millions of dollars in potential judgments in lawsuits against him. He estimated his assets to be worth between $1 million and $10 million.
In his most recent financial filings in the bankruptcy case, Giuliani reported having about $94,000 cash on hand at the end of May, while his company, Giuliani Communications, had about $237,000 in the bank. A main source of income for Giuliani over the past two years has been a retirement account with a balance of just over $1 million in May, down from nearly $2.5 million in 2022 after withdrawals. In May, he spent nearly $33,000, including nearly $28,000 for condo and coop costs for his Florida and New York City homes. He also spent about $850 on food, $390 on cleaning services, $230 on medicine, $200 on laundry, and $190 on vehicles.
The former New York mayor and Donald Trump adviser filed for Chapter 11 bankruptcy reorganization in December, days after Freeman and Moss won their defamation case. They said Giuliani’s targeting of them due to Trump’s lies about the 2020 election being stolen led to death threats that made them fear for their lives. Dublin and Strickland accused Giuliani of failing to turn over financial documents, ignoring bankruptcy court orders, and trying to delay the process through litigation tactics. They said they would likely ask for the bankruptcy case to be dismissed at another hearing on July 10.
“Our view is we do not have a good-faith debtor. He has misbehaved every step of the way,” Dublin said. “We think again that the debtor here has been trying to game the system.” Strickland added, “For the last six months, my clients and the committee have been sounding alarm bells about Mr. Giuliani’s problematic conduct including his underhanded litigation tactics. … We think that the conversion request (to liquidation) just underscores the bad-faith approach, and don’t think that this is a party that should be allowed to exploit the bankruptcy process any longer.”
Giuliani’s bankruptcy lawyer, Gary Fischoff, did not directly address those allegations in court and did not immediately return a message seeking comment after the hearing. He told the judge that Giuliani has the right to convert the case to a Chapter 7 liquidation. If his case is converted to a liquidation, a trustee would be appointed to take control of his assets and sell many of them off to help pay creditors. If it is dismissed, Freeman and Moss could bring their effort to collect on the $148 million award back to the court in Washington, D.C., where they won their lawsuit, and avoid having to pay more legal fees for bankruptcy court.
Freeman and Moss, meanwhile, have a pending request before the judge to declare that the $148 million judgment cannot be discharged during Giuliani’s bankruptcy. The bankruptcy is part of the legal quagmire that Giuliani is in across the country. On Tuesday, the former federal prosecutor was disbarred as an attorney in New York after a court found that he repeatedly made false statements about Trump’s 2020 election loss. Giuliani is also facing the possibility of losing his law license in Washington. A board in May recommended that he be disbarred, though a court has the final say.
In Georgia and Arizona, Giuliani is facing criminal charges over his role in the effort to overturn the 2020 election. He has pleaded not guilty in both cases. When he filed for bankruptcy, Giuliani listed nearly $153 million in existing or potential debts, including almost $1 million in state and federal tax liabilities, money he owes lawyers, and many millions of dollars in potential judgments in lawsuits against him. He estimated he had assets worth $1 million to $10 million.
In his most recent financial filings in the bankruptcy case, he said he had about $94,000 cash in hand at the end of May while his company, Giuliani Communications, had about $237,000 in the bank. A main source of income for Giuliani over the past two years has been a retirement account with a balance of just over $1 million in May, down from nearly $2.5 million in 2022 after his withdrawals, the filings say. In May, he spent nearly $33,000 including nearly $28,000 for condo and coop costs for his Florida and New York City homes. He also spent about $850 on food, $390 on cleaning services, $230 on medicine, $200 on laundry, and $190 on vehicles.
Source: AP, NPR
