NEW YORK – Rudy Giuliani’s bankruptcy case was dismissed by a judge on Friday, denouncing the former mayor of New York City as a “recalcitrant debtor” who disregarded the legal system in an attempt to avoid paying a $148 million defamation judgment and other debts.
Giuliani was chastised by U.S. Bankruptcy Judge Sean Lane for his persistent “uncooperative conduct,” self-dealing, and lack of transparency. The judge pointed out his disobedience to court orders, his omission of his revenue sources, and his seeming reluctance to have an accountant review his records.
“A clear red flag would be such a failure,” wrote Lane.
His quest for bankruptcy protection is ended by the case’s dismissal, but his debts remain unpaid. To recover at least a portion of the money they are due, his creditors may now seek alternative legal remedies, such as obtaining a court order to confiscate his properties and other assets.
Now that Giuliani has the freedom to do so, he may also attempt to appeal the defamation ruling that resulted from his attempts to reverse Republican Donald Trump’s defeat in the 2020 presidential contest.
During a hearing on Wednesday, Lane said he would likely dismiss the case. Although Giuliani’s attorney had considered various avenues to pursue the case, they finally decided that dismissing it was the best course of action. A 12-month prohibition on Giuliani re-filing for bankruptcy protection is part of the rejection.
“It has proven to be an elusive goal to bring transparency into Mr. Giuliani’s finances,” wrote Lane, adding that he “sees no evidence that this will change.”
The judge listed some of his concerns as Giuliani funneling his income into companies he owned, never disclosing any money from those ventures, starting to promote his own “Rudy Coffee” brand, and being late in disclosing a contract he had to write a book. Giuliani also received at least $15,000 a month from his now-canceled talk radio show.
Ted Goodman, a spokesman for Giuliani, claimed on Friday that the bankruptcy case had been “burdened with many of the same voluminous and overly broad discovery requests and other actions,” drawing a comparison to the “grossly unfair” defamation case. He asserted that leaks “intended to harm the mayor and destroy his businesses” were among them.
Without providing any proof, Goodman said that Giuliani’s legal issues had political undertones and were intended as a punishment for looking into President Joe Biden’s son Hunter and “to deter anyone else from asking questions or getting to the truth.” He said, however, that they are certain that “the mayor will be fully vindicated and our system of justice will be restored.”
Longtime Trump supporter Giuliani declared bankruptcy in December of last year, a few days after former Georgia election workers Ruby Freeman and Wandrea “Shaye” Moss were awarded staggering damages. The filing for bankruptcy stopped debt collection.
At Wednesday’s hearing, an attorney representing Freeman and Moss charged Giuliani of using bankruptcy as a “bad-faith litigation tactic” and a “pause button on his woes,” pleading with Lane to dismiss the case so that the plaintiffs could seek the damages they were awarded.
The attorneys for the women, Ruby Freeman and Shaye Moss, claimed on Friday that their clients had already had to wait too long for justice. “We are happy that the judge recognized Mr. Giuliani’s deceit and stopped him from abusing the bankruptcy procedure. We’ll start applying our ruling on him right away.
The other creditors of Giuliani desired to continue the bankruptcy process, with a trustee appointed by the court seizing possession of Giuliani’s property.
Giuliani asked earlier this month that the case be changed to a Chapter 7 liquidation, in which assets would be sold by a trustee hired to help pay creditors.
During the hearing on Wednesday, Giuliani’s attorney Gary Fischoff reexamined that notion and argued in favor of dismissing the lawsuit, pointing out that liquidation-related administrative costs would “consume if not 100%, a substantial portion of the assets.”
Now that they have won their lawsuit, Freeman and Moss can return to the Washington, D.C. court to attempt to collect on the award. The women claimed that when Trump almost lost Georgia to Biden, Giuliani singled them out and threatened to kill them, making them fearful for their lives.
The 80-year-old Giuliani, a former federal prosecutor and Republican presidential contender in 2008 who was dubbed “America’s Mayor” for his composed and collected leadership following the terrorist attacks of September 11, 2001, is beset by a number of legal issues, including bankruptcy.
He was forbidden from practicing law in New York last week after it was determined by a judge that he had regularly made false claims on Trump’s defeat in the 2020 election. He may also lose his Washington bar license as a result of a board’s May recommendation that he be disbarred.
Giuliani is being prosecuted for his involvement in the attempt to rig the 2020 election in Georgia and Arizona. In all instances, he entered a not-guilty plea.
In his bankruptcy filing, Giuliani reported around $153 million in current and prospective debts, which included roughly $1 million in unpaid state and federal taxes, money owed to attorneys, and millions of dollars in future judgments from litigation brought against him. His assets, he calculated, were between $1 and $10 million.
According to his most recent financial disclosures in the bankruptcy case, at the end of May, he had around $94,000 in cash on hand, while Giuliani Communications, his company, had approximately $237,000 in bank accounts. According to the documents, Giuliani’s retirement account, which had a balance of slightly over $1 million in May following his withdrawals of almost $2.5 million in 2022, has been his primary source of income for the last two years.
He spent about $33,000 in May, almost $28,000 of which went toward condo and co-op fees for his residences in New York City and Florida. In addition, he spent over $850 on groceries, $390 on housekeeping, $230 on prescription drugs, $200 on laundry, and $190 on cars.
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