A judge said on July 10 that he will likely throw out Rudy Giuliani’s bankruptcy case, after lawyers for the former New York City mayor and his largest creditors—two ex-Georgia election workers who won a $148 million defamation suit against him—agreed that it would be the best way to proceed.
U.S. Bankruptcy Judge Sean Lane said he expects to issue his decision by the end of the week. The ruling could be issued during a hearing scheduled for July 12. Judge Lane ruled against Mr. Guiliani’s request to convert the case to a liquidation, saying that option would not be in the best interest of his creditors.
“I’m leaning toward dismissal frankly because I’m concerned that the past is prologue,” Judge Lane said during a hybrid in-person and Zoom status hearing in White Plains, New York.
The case has been roiled by allegations that Mr. Guiliani has disregarded bankruptcy laws and is hiding assets. A dismissal would end his path to bankruptcy protection, but it would not eliminate his debts. His creditors could pursue other legal remedies, including seeking a court order to seize his apartment and other assets to recover at least a portion of the money they are owed.
Lawyer Gary Fischoff said dismissing the case would allow him to file an appeal in the defamation case.
Rachel Strickland, the lawyer representing former election workers Ruby Freeman and her daughter, Wandrea “Shaye” Moss, accused Mr. Giuliani of using the bankruptcy process as a “bad-faith litigation tactic.”
The defamation lawsuit stems from Mr. Giuliani’s accusations that Ms. Freeman and Ms. Moss committed voter fraud while counting ballots after the 2020 presidential election.
At one point, Judge Lane scolded Mr. Giuliani for interrupting the hearing. The former mayor, who joined the hearing by phone, said Ms. Strickland’s comments and remarks about his many legal challenges were “highly defamatory, your honor.”
Lawyer Philip Dublin, who is representing a committee of other creditors, said the committee would prefer that the bankruptcy case continue with the appointment of a Chapter 11 trustee.
Mr. Giuliani filed for Chapter 11 reorganization in December 2023 following the former election workers’ win in their defamation case.
Earlier this month, Mr. Giuliani asked the court to convert his Chapter 11 bankruptcy case to a Chapter 7 liquidation, which would require an appointed trustee to take control of his assets and sell many of them to help pay off his creditors.
Mr. Fischoff reconsidered the request during the July 10 hearing and pushed for a dismissal instead, noting that administrative fees related to liquidation would “consume, if not 100 percent, a substantial portion of the assets.”
If the bankruptcy is dismissed, Ms. Freeman and Ms. Moss could pursue their effort to collect the $148 million awarded in the U.S. District Court for the District of Columbia case, in which they won their lawsuit and avoid having to pay more legal fees for bankruptcy court.
Judge Lane said dismissal would include a 12-month ban on Mr. Giuliani filing again for bankruptcy protection.
Continued Woes
Last week, Mr. Giuliani was disbarred as an attorney in New York after a court found that he had repeatedly made false statements contesting the 2020 election results.The former federal prosecutor is also facing criminal charges in Georgia and Arizona for his part in challenging the 2020 election. He has pleaded not guilty in both cases.
In December 2023, Mr. Giuliani listed nearly $153 million in existing or potential debts, including nearly $1 million in state and federal tax liabilities. His assets were estimated to be between $1 million and $10 million.
Recent court filings in the bankruptcy case state that his cash on hand was about $94,000 at the end of May. His company, Giuliani Communications, had approximately $237,000 in the bank.
Mr. Giuliani’s main source of income for the past two years has been a retirement account. In May, the balance was just more than $1 million, down from nearly $2.5 million in 2022, according to court filings.
