Rudy Giuliani's creditors, including two former Georgia campaign workers who won a $148 million defamation lawsuit against him, are fighting his attempt to convert his bankruptcy into a liquidation, saying they will likely seek dismissal of the case instead because they say he violated bankruptcy law.
The comments came Wednesday during a status hearing via Zoom before U.S. Bankruptcy Judge Sean Lane in White Plains, New York.
The former New York mayor and adviser to Donald Trump filed for Chapter 11 bankruptcy in December, just days after former election workers Ruby Freeman and her daughter Wandrea “Shaye” Moss won their defamation lawsuit, saying Giuliani's attacks on them over Trump's lies about 2020 election fraud led to death threats that left them fearing for their lives.
Philip Dublin, a lawyer for a committee of Giuliani's creditors, and Rachel Strickland, a lawyer for Freeman and Moss, 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 that the bankruptcy case be dismissed at another hearing on July 10.
“In our view, we are not dealing with a debtor acting in good faith. He has behaved poorly at every turn,” Dublin said of Giuliani. “We believe, again, that the debtor was trying to game the system here.”
Strickland added: “Over the past six months, my clients and the committee have raised alarms about Mr. Giuliani's problematic conduct, including his underhanded litigation tactics. … We believe the motion to convert (to liquidation) only underscores the bad faith approach, and believe this party should no longer be allowed to exploit the bankruptcy process.”
Giuliani's bankruptcy attorney, Gary Fischoff, did not directly address those allegations in court and did not immediately respond to a request for comment after the hearing. He told the judge that Giuliani had the right to convert the case into a Chapter 7 liquidation.
If his case is converted to liquidation proceedings, as Giuliani requested on Monday, a trustee would be appointed to take control of his assets and sell much of them to pay creditors. If the motion is dismissed, Freeman and Moss could take their efforts to collect the $148 million in compensation back to the Washington, D.C., court where they won their lawsuit, thus avoiding having to pay further bankruptcy court legal fees.
Freeman and Moss, meanwhile, have filed a motion asking the judge to declare that the $148 million judgment cannot be overturned – or dismissed – during Giuliani's bankruptcy.
The bankruptcy is part of the legal quagmire Giuliani is mired in across the country. On Tuesday, the former federal prosecutor in New York was disbarred after a court found he repeatedly made false statements about Trump's 2020 election defeat.
Giuliani also faces the risk of losing his license to practice law in Washington. In May, a committee recommended that he be stripped of his license, but the court will have the final say.
Giuliani is facing criminal charges in Georgia and Arizona for his role in efforts to overturn the 2020 election. He has pleaded not guilty in both cases.
When Giuliani filed for bankruptcy, he had nearly $153 million in existing or potential debts, including nearly $1 million in state and federal tax debts, money he owes to lawyers, and many millions of dollars in potential judgments in lawsuits against him. He estimated his assets were worth between $1 million and $10 million.
In his most recent financial filings in the bankruptcy case, he said he had about $94,000 in cash on hand at the end of May, while his company, Giuliani Communications, had about $237,000 in the bank. A major source of income for Giuliani over the past two years was a retirement account with a balance of just over $1 million in May, up from nearly $2.5 million in 2022 after his withdrawals, the filings say.
In May, he spent nearly $33,000, including nearly $28,000 on condos and co-ops for his homes in Florida and New York City. He also spent about $850 on groceries, $390 on cleaning services, $230 on medications, $200 on laundry and $190 on vehicles.